Industry & Economy
-
Excise and Customs
New rule on cenvat credit
|
Excise on ‘destroyed’ finished goods
|
K.R.Srivats
New Delhi, Sept. 12
Bringing legal certainty to the issue of cenvat credit entitlement on the inputs used in the finished goods that get destroyed, the Finance Ministry has ruled that the cenvat credit taken on inputs need to be reversed in cases where excise duty on the finished goods are remitted on account of the latter goods getting destroyed by fire or other circumstances.
This implies that a manufacturer of finished goods would not be entitled to take cenvat credit on the inputs if the finished goods were to be destroyed and the excise duty on such goods were to be remitted by the excise department.
Duty remission by the excise department is required in situations where finished goods are destroyed due to fire or any other circumstances beyond the control of the manufacturer.
This is because a product becomes excisable on manufacture itself and payments are allowed to be made later as a facilitation measure.
Faced with conflicting pronouncements from various Tribunals on the matter of admissibility of cenvat credit, the Finance Ministry has now amended the Cenvat Credit Rules to insert a legal provision to stipulate that where remission is granted, cenvat credit has to be reversed.
Over the past decade, various Tribunals across the country had come up with different pronouncements on whether cenvat credit would need to be reversed or not in such situations.
There were pronouncements in favour of the assesses as well as the revenue department.
More Stories on :
Excise and Customs |
Accidents
Article
E-Mail
::
Comment
::
Syndication
::
Printer Friendly Page
|
