Cenvat Credit on sample and replacement invoices

[Mathurthi RamKumar]

Dear All,

Greetings of the day.. Kindly confirm that cenvat credit of samples and replacement is claimable or not. (i.e some times machinery supplier send replacement parts with excise invoice. They shows basic amount as discount and excise invoice as per cenvat rule)

Kindly guide me.

Regards

M.RamKumar

[MUKUND THAKKAR]

Dear M,Ramkumar,

if you are cleared your defective part on payment of excise duty than you can availed cenvat credit.

[YAGAY andSUN]

Dear Mathurthi,

Proportioned CENVAT credit and Input Tax Credit, if any, needs to be reversed to avail the CENVAT credit and Input Tax Credit on replaced parts etc. On samples, if these are being used in or in relation to the manufacturing of finished goods then you can claim otherwise not.

Regards,

YAGAY and SUN

(Management, Business and Indirect Tax Consultants)

[Mahir S]

If machine is under warranty and such replacement parts are under warranty period, then cenvat credit can be availed, provided the damaged part is returned back to the supplier on excise invoice and on reversal of duty

AI Summary

Cenvat credit on replacement parts and samples requires return of damaged parts and reversal for warranty or non manufacturing use. For replacement parts, Cenvat credit is available if the defective part was cleared on payment of duty or where warranty replacements are supplied provided the damaged part is returned on an excise invoice and duty is reversed. For samples, Cenvat credit and any Input Tax Credit are claimable only when samples are used in or in relation to the manufacture of finished goods; otherwise credit is not available. Proportionate credit and Input Tax Credit reversals or adjustments apply when claiming credit on replaced parts or samples.