Inputs

Indirect Tax
Cenvat Credit

#### What is Removal of Inputs As Such

It means sale/return/use of inputs as it is without being usedIf inputs are removed as such,

1. the manufacturer of the final products or provider of output service has to pay(reverse) an amount equal to the credit availed in respect of such inputs or capital goods.
2. Such removal shall be made under the cover of an Invoice referred to in Rule 9.
3. The buyer will be able to take credit of such amount

#### Exceptions

The amount need not be paid if

1. Inputs are removed for providing free warranty on final products
2. Service Provider can remove inputs/capital goods outside the factory for providing free warranty.

Example

20000 kg Goods Purchased from Q ltd

 QLTD Item A 100000 (20000 Kg*5) Add Excise 12.5% 12500 Total 112500

Suppose 600 KG Returned to Q ltd

What is treatment of Cenvat on return of goods

Example

20000 kg Goods Purchased from Q ltd

 QLTD Item A 100000 (20000 Kg*5) Add Excise 12.5% 12500 Total 112500

Suppose 600 KG not used in production but sold to S ltd

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