Cenvat Credit

[Asked by Guest]

Hi,

In how days the material sent for demonstration has to come back to manufacturing place to avail cenvat credit.

If a sold machinery is received back for repairs, what is the procedure?

Can some material be sent for demonstration without invoice on returnable basis - what document is required and what will the time period with in which it has to be received back?

 

[YAGAY and SUN]

Please check Rule 16 of the Central Excise Rules, 2002 read with Rule 4 5 (a).

[Arup Das]

HI Mr. Sunil Bandekar

If you are sending a excisable material( i.e your finished goods) for demonstration, first you need to charge excise duty and send the material for demonstration.

There is not time limit for getting back the goods, as soon as the material is received if your going to do further processing on it, you can avail the cenvat credit for the same.

If you want to send an excisable material you cannot send the material without an excise invoice, if it is a non-excisable material then you can send it on a returnable gate pass and attach a letter explaining the purpose i.e sending material for demonstration purpose and will be returned back.

For repairs, better to follow the job work procedure.

Regards

Arupp Das

[Madhukar N Hiregange]

If one has followed the procedures latest within 180 days- but normally within a few days of the exhibition being closed.

Sold machinery if sent under rule 4(5) then record for incoming and removal after repair. The parts used for repair unless in warranty would require reversal of credit if any .

Under rule 4(5)(a) for sale on approval- 180 days.

AI Summary

Cenvat credit: conditions for demonstration goods, repairs and returnable supplies, invoicing and credit reversal principles.
Cenvat credit on demonstration dispatches requires compliance with excise invoicing for excisable goods and a returnable gate pass and purpose note for non excisable items; credit can be availed once demonstrational goods return and are used in manufacture provided records of removal and receipt are maintained. Repairs of returned sold machinery should follow job work procedures with records of incoming and outgoing movements, and non warranty parts used in repair may necessitate reversal of credit. Sale on approval arrangements require observance of prescribed return time limits and corresponding recordkeeping to determine credit entitlement or reversal.