Cenvat credit on exempted product cleared in domestic market

[pardeep bisht]

we are manufacturer of exciseable product as well as exempted product . Our exempted product maximum cleared for export,a very low quantity we cleared in domestic market,on the clearance in DTA we pay 5% amount as per rule 6(3)i . and avail the Cenvat credit for all the Inputs and services. Please clear we are doing write thing

AI Summary

Manufacturer Queries Cenvat Credit on Exports; Rule 5 Allows Refund, Rule 6(3)(i) Requires Reversal for Domestic Sales. A manufacturer of both excisable and exempted products, primarily exporting exempted goods, inquired about the correctness of their Cenvat credit practices. They pay a 5% amount on domestic clearances under rule 6(3)(i) and avail Cenvat credit for inputs and services. Respondents clarified that exports are not treated as exempted goods, and Cenvat credit must be reversed for exempted goods sold domestically. However, accumulated credit due to exports can be refunded under rule 5 of the Cenvat Credit Rules, 2004. Proportionate credit reversal is required for domestic sales, with the balance eligible for refund.