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Friday, Nov 26, 2004

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Finance Ministry amends Cenvat credit rules

Our Bureau

New Delhi , Nov. 25

THE Finance Ministry is keen to build a database on Cenvat Credit utilisation in certain industry sectors. The revenue department has amended the Cenvat Credit Rules 2004 to require certain manufacturers of specified excisable goods to file a declaration furnishing information about principal inputs required for manufacture of finished excisable goods.

The declaration has to be filed once in a year by April 30 each year. It is not required to be filed by all manufacturers but only by those manufacturing certain specified commodities who have also paid excise duty of Rs 1 crore and above in a preceding financial year.

"In certain commodities, we want to have an indicative trend of Cenvat credit utilisation. We are only seeking information that has not been so far collected by us. Around 3,000 units in about 15 sectors are likely to be covered under this requirement," a revenue department official said.

There are more than one lakh units that are registered with the revenue department.

Industry observers, however, see revenue department's move as an attempt to tackle the increasing tendency among corporates to misuse Cenvat credit utilisation.

The industry sectors and sub-segments that are being covered include chemicals, plastics, iron and steel, electrical and mechanical machinery.

Considering the quantum of availment of Cenvat credit, the Finance Ministry has felt it necessary to obtain some data of principal inputs and their consumption vis-a-vis the finished goods. Such information is expected to facilitate selection of units for audit and save assessees from routine queries and checks.

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