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

View Answer

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

View Answer

  1. Indirect Tax
  2. Cenvat Credit

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CA Maninder Singh
CA Maninder Singh is a Chartered Accountant for the past 8 years. He provides GST Training in Delhi. Register now.