removal as such-invoicing

[Dalia Felix]

Is it possible to adopt 'removal as such' when the transaction value is more compared to the purchase price for the inputs? What are the precautions to be taken and how the invoicing is to be done?

AI Summary

Rule 3(4)(b) CENVAT Credit: Repayment Required for Input Removal; Profit Subject to VAT/Income Tax; Trading Implications Discussed. A query was raised regarding the applicability of 'removal as such' when the transaction value exceeds the purchase price of inputs under Central Excise. Three responses were provided. The first response clarified that under Rule 3(4)(b) of CENVAT Credit Rules, 2004, CENVAT credit must be repaid when inputs are removed as such, with any profit being subject to VAT or Income Tax. The second response agreed, emphasizing that excise duty should match the CENVAT credit taken. The third response noted that such transactions might be considered trading activity, potentially affecting CENVAT credit eligibility.