Cenvat credit

[Gopal B]

Dear sir,We are manufacturers.the Raw material which is used for FG is selling local as well as exports.shall I take full credit of cenvat or proportionately on my inputs.Pls advise.

[Rajagopalan Ranganathan]

Sir,

You can take the full duty paid on inputs as credit which is used in the manufacture of FG. There is no question of taking proportionate credit. The credit of duty paid on inputs used in the manufacture of FG which is exported can be utilized for payment of duty on FG sold locally. If it is not possible then you can claim the refund of the same under rule 5 of Cenvat Credit Rules, 2004.

[Mahir S]

Yes, you can avail total cenvat credit, as discussed above.

AI Summary

Manufacturer Eligible for Full Cenvat Credit on Inputs for Local and Export Sales; Refund Possible Under Rule 5, 2004. A manufacturer inquired whether they should take full or proportionate Cenvat credit on inputs used for finished goods (FG) sold both locally and for export. Two respondents advised that the manufacturer can take full credit for the duty paid on inputs used in FG production. The credit can be applied to duties on FG sold locally, and if not feasible, a refund can be claimed under Rule 5 of the Cenvat Credit Rules, 2004.