Using the unutilized cenvat of one unit for the payment of other unit

[Rajkumar Chandnani]

We have two units registerd under Excise with XM001 & XM002. We have large unutilised Cenvat credit balance in one unit(XM001). Can we use this to pay excise of other unit(XM002)?

[Surender Gupta]

As such there is no provision for utilizing of cenvat credit of one unit by the another unit. However, you can move inputs / material from one unit to another after reversing the cenvat credit. On that basis, after receiving the material so despatched from one unit, second unit can avail and utilize the cenvat credit. Indeed, the material must be eligible input or capital good for the another unit.

[RadheyShyam Mangal]

no, the cenvat credit is available unitwise and cross utilaisation of excess credit of one unit for payment duty of another unit of same person is not possible.

AI Summary

Cenvat Credit Cannot Be Cross-Utilized Between Different Units, But Input Transfer With Reversed Credit Is Possible A query was raised regarding the possibility of using unutilized Cenvat credit from one excise-registered unit (XM001) to pay the excise duty of another unit (XM002). Two responses were provided. The first response indicated that there is no direct provision for such cross-utilization, but suggested transferring inputs or materials between units with reversed Cenvat credit, allowing the receiving unit to avail of the credit if the materials qualify as eligible inputs or capital goods. The second response confirmed that Cenvat credit is unit-specific and cannot be used across different units.