CENVAT

VAT
Value added tax means that the tax is payable only on value added to commodities and on the services rendered. A comprehensive form of VAT covers the value added at all three levels ,that is manufacturing ,wholesaling and retailing.

RULE 5

For export under bond ,cenvat credit on input or input services can be utilised for payment of duty on any final product cleared for home cosumption or for export on payment of duty on final product or service tax.Where for any reason such adjustment is not possible ,the manufacturer shall be allowed refund of such amount.

Rule 6

As per Rule 6{1},the CENVAT CREDIT shall not be allowed on such quantity of inputs which is used in the manufacture of exempted goods .For this purpose the manufacture [in case of inputs ]or output service provider [in case of service ]may follow either of following 2 methods; Maintain Separate A/C; The manufacturer shall maintain separate accounts for different goods. Not to maintain separate A/C; The manufacturer of goods opting not to maintain separate account ,shall have to reverse the CENVAT CREDIT in following manner; Option 1; 10% of value of exempted goods or 8%of value of exempted services. Option 2; pay amount equal to the CENVAT CREDIT attributable to the inputs used in manufacture of exempted goods .

RULE 8
It provides that the commissioner of Central Excise can permitinputs in respect of which the CENVAT CREDIT has been taken to be stored outside the factory of the manufacturer.

RULE 9

Documents & accounts used /maintained in CENVAT An invoice issued by a manufacturer ,an importer ,a first stage dealer ,a consignment agent . A supplementary invoice. A certificate issued by custom appraiser . A challan evidencing the payment of service tax. A bill of entry .

RULE 10
If a manufacturer shifts his factory to another site or the factory is transferred on account of charge in ownership or on account of sale ,merger etc then he shall be allowed to transfer CENVAT CREDIT lying unutilised ,only if the stock of inputs are also transferred.

RULE 14
Where the CENVAT CREDIT has been taken or utilised wrongly ,the same along with interest shall be recovered from manufacturer under provisions of section 11A,11AA &11AB.

RULE 15
If a person take wrong CENVAT CREDIT then his goods shall be liable to confiscation or a penalty can be imposed that too should not exceed the either amount of duty or ten thousand rupees ,whichever is greater.

Rule 15A;
A general penalty upto Rs.5000 can be imposed in case of contravention of any of the provision of CENVAT CREDIT RULES 2004, for which no specific penal provision exists.

Manufactur er of final products. Provider of output service.

CENVAT RETURNS;
month

By 10th of next month.

Half yearly return By the end of the month following the particular half year.

First stage or second stage dealer,

quaterly

By 15th of next month after the end of the quarter.