Reversal of equilent Cenvat Credit on removal of inputs

[VINOD KUMAR]

Dear expert,

I am unable to understand how the amount of 'equivalent cenvat on removal of inputs as such' is ascertained.

Say, a manufacturer has procured domestic/imported inputs during the year 2007 to 2014. The total amount of Cenvat availed on these inputs will be different because of difference in year wise rate of duty for example it may 16.48% in 2008-09 and 8.24% in 2009-10. Now, he has to remove certain inputs as such. How will he ascertain the amount of Cenvat Credit required to be reversed i.e. whether he will have to reverse 16.48% or 8.24%. Please reply, How the domestic and imported inputs and inputs suffering different rate of duty is stored in the stores to ensure their easy identification. Which book should I study to understand all the transactions/procedure involved in the industry for procurement and use of inputs right from purchase order till the use of material.

AI Summary

Determining Cenvat Credit Reversal for Inputs Removed at Varying Duty Rates: FIFO or LIFO Methods Advised A participant in a discussion forum sought advice on calculating the reversal of Cenvat Credit for inputs removed as such, given varying duty rates over different years. The query highlighted the challenge of determining the correct reversal percentage due to differing rates, such as 16.48% in 2008-09 and 8.24% in 2009-10. An expert responded, suggesting the use of FIFO or LIFO methods, depending on the organization's practice, and recommended studying costing books for a better understanding of the procedures and standards relevant to indirect tax matters.