CENVAT
The Modvat Scheme has been replaced by a new set of rules called CENVAT Credit Rules 2002.
The definition of Capital Goods, Exempted Goods, Final products and the inputs has been provided in Rule 2 of CENVAT Credit Rules, 2002. It also included the list of items eligible for Capital Goods as well as for the inputs.
DUTIES ELIGIBLE FOR CENVAT
A manufacturer or producer of final product is allowed to take CENVAT credit of duties specified in the Cenvat Credit Rules , 2002.
WHEN AND HOW MUCH CREDIT CAN BE TAKEN
- 1. The Cenvat Credit in respect of inputs may be taken immediately on receipt of the inputs.
- 2. The Cenvat credit in respect of Capital Goods received in a factory at any point of time in a given financial year shall be taken only for an amount not exceeding fifty percent of the duty paid on such capital goods in the same financial year and the balance of Cenvat Credit may be taken in any subsequent financial year.
- 3. The Cenvat credit shall be allowed even if any inputs or capital goods as such or after being partially processed are sent to a job worker for further processing, testing, repair etc. and it is established from the records that the goods are received back in the factory within180 days of their being sent to a job worker.
- 4. Where any inputs are used in the final products which are cleared for export, the Cenvat Credit in respect of the inputs so used shall be allowed to be utilised towards payment of duty on any final product cleared for home consumption and where for any reason such adjustment is not possible, the manufacture shall be allowed refund of such amount.
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