cenvat credit elgible for lpg gas

[Ramakrishnan Seshadri]

Dear Sir,

We are the manufacture of automobile parts.We are purchasing lpg gas for paint shop to do painting for our parts.

Our question is whether the excise duty paid by the supplier is eligible for cenvat credit and tnvat input credit .

Kindly clarify.

Thanks and Regards,

S.ramakrishnan.

[Rajagopalan Ranganathan]

Dear Shri. Seshadri,

Credit of duty paid on light diesel oil, high speed diesel oil or motor spirit, commonly known as petrol alone is not available under CENVAT Credit Rules, 2004. Duty paid on all other goods is available as credit under the above rules.

[chetan rachhadiya]

agree with rajagopalan sir

[YAGAY andSUN]

Dear Ramakrishnan,

There is no specific denial in the CENVAT credit Ruels, 2004 in this regard. Hence, credit would be available on LPG as it is being used in manufacturing of finished goods. However, no Input Tax Credit would be allowed under the State's VAT Act read with schedules made thereunder.

Input tax credit on LPG used as fuel for manufacturing of automobile parts, not allowable. It was required to maintain constant high temperature 85OC to 88OC to melt and harden the raw material and in drilling, turning, welding, stamping, etc. Being specifically mentioned in Schedule E as subject to “Nil” ITC, the request of the appellant to allow the same was not acceptable. Accordingly, appeal failed.

Perfect Wheels (P) Ltd., Gurgaon v. State of Haryana (2014) 49 PHT 371 (HTT) (FB)

Regards

YAGAY and SUN

Management, Business and Indirect Tax Consultants

[PAWAN KUMAR]

Dear Sir,

As per my view, Cenvat credit is elegible on lpg gas used in manufacturing of finished goods.

[Mahir S]

Sir,

Cenvat credit on lpg gas is generally available as no specific denial thereon has been provided in the definition of input credit, however its availability is to be decided on case to case basis.

In your case, it appears the lpg gas is not used in any manufacturing activity and does not have any relevance with the finished goods, even for purpose of painting work there appears to be no requirement of lpg gas, hence cenvat credit not admissible in your case.

AI Summary

Cenvat credit on LPG generally available, but state input tax credit may be restricted depending on usage and schedule exclusions. CENVAT credit for duty paid on LPG is generally available under the CENVAT Credit Rules when LPG is used as an input in manufacturing finished goods, but availability is fact sensitive and may be denied if LPG is not integral to production; additionally, State VAT law may specifically exclude input tax credit for fuels under statutory schedules, so VAT credit on LPG can be barred even where central CENVAT is claimable.