Cenvat credit on bicycle

[manish kumar]

Dear sir,

Thanks for reply of my previous curies.

Now I am present here with a new query. If a dealer has purchased bicycle under exemption from an area based central excise exemption in excise regime. Then in GST regime he has taken credit on above said goods with some provision . Now he supplied bicycle after utilising such CENVAT credit. Can we allow such CENVAT credit availment & utilisation ..Please also explain on which ground he has taken Cenvat credit on bicycle ?

AI Summary

Cenvat credit on previously exempted goods depends on presence of tax component and entitlement for taxable supplies.
Whether Cenvat credit may be availed and utilised for bicycles purchased under a pre GST area based excise exemption turns on whether tax was actually paid on those purchases; absent a tax component at procurement, Cenvat credit cannot properly be claimed, and the later imposition of GST does not retroactively create entitlement-any credit claim must meet statutory and transitional conditions and be supported by evidence of tax paid.