Cenvat Credit on Finished Goods

[Laxmaiah Vanamamula]

we have registered manufaturing unit, 

Products > PVC Pipes

Query > we have received a order from Customer, for 4  sizes,

we manufactered only 3 sizes, we booughtout( sold) from others the above 1 size,

can we take Cenvat credit on above boughtout size, Please clarify.

Thanking you sir,

V.Laxmaiah

[Mukund Thakkar]

Dear V.laxmaiah,

cenvat  credit  is  eligable  only inputs, In your  case  you  are purchasing  the goods  and your  final product is  same only size different  is  there. as  per  my understanding  you can not  carry out  any process in such goods  only supply as it is  along  with your product. so in such situation you can not  avail the cenvat credit. please donot  treat your pruchase as  boughout  items. because your final product is same..

[Rajesh Nathoo]

Dear Mr. Laxmaaih,

  I  m  in agreement with Ms. Jyoti,s Reply, it is just like trading . U cannot take credit on traded  goods as u are  not obliged to pay Excise duty when u sell these to ur customs . U should maintain a separate account of  these traded items .

AI Summary

Cenvat credit on purchased finished goods is not permissible; treat bought out items as traded supplies and account separately. The document states that Cenvat credit is available only on inputs used in the manufacturer's production and not on purchased finished goods that are supplied as-is; such bought-out traded items do not attract excise when resold by the manufacturer and must be maintained in separate accounts rather than claimed as input credit.