Pass on of CVD / SAD by manufacturer importer

[Asked by Guest]

Sir,

"A" and "B" (sister unit) is registered as a manufacturer in Excise.

"A" make high seas purchase (import) and credit taken CVD-12% and SAD-4%.

Now "A" 50% of goods use for manufacturing final product and balance 50% goods as such as stock transferred to "B" unit against Form-F and Both duty (CVD and SAD) also passon to "B".

Now "B" liable to credit taken CVD-12% and SAD-4%.

Please advise.

Thanks

Kailash

[Mahir S]

B unit may avail credit on CVD and Sad, to the extent of 50 % of total credit.

AI Summary

Input tax credit entitlement: recipient unit may claim credit for transferred imported duties proportionate to received stock.
A importer manufacturer availed credit of CVD and SAD on imported inputs, consumed half and transferred the other half to its sister unit against Form F with duties passed on. The recipient unit may avail credit of the duties attached to the transferred inputs only to the extent proportionate to the stock received, i.e., a corresponding share of the total credit initially taken by the transferor.