Availability of cenvat credit on transfer to sister concern

[Guest]

TRANSFER OF CENVAT CREDIT AVAILED INPUT TO SISTER CONCERN.WHO WILL AVAIL THE CREDIT INTURN?HOW TO TRANSFER IT?

[Guest]

Under the present CENVAT provisions, transfer of credit can be done only in respect of units/divisions of same concern. Transfer of credit to other concern (incl. sister concern if it is a separate entity)is available only in the case of change in ownership by way of sale, merger, amalgamation, lease or transfer of business as such.

[Surender Gupta]

Credit on inputs can be availed by the unit who receives the same in its premises. Therefore, there is no scope of inter transfter of cenvat credit. However, in case input is transferred to other unit, fist unit has reverse the cenvat credit availed originally and such removal shall be on excise invoice. After receiving the excise invoice, second unit would avail cenvat credit.

AI Summary

CENVAT credit transfer restricted to same legal entity; separate concerns may avail credit only on ownership change. CENVAT credit transfer is allowed only between units/divisions of the same legal entity; transfer to a separate concern (including a sister concern) is permitted only upon change in ownership or business transfer such as sale, merger, amalgamation or lease. If inputs are moved to another unit, the transferor must reverse the credit and issue an excise invoice, after which the receiving unit may avail CENVAT credit on that invoice.