TMI BlogCenvat credit on duty on discounted amountX X X X Extracts X X X X X X X X Extracts X X X X ..... Cenvat credit on duty on discounted amount is admissible or not? Example: Manufacturer 'A' has purchase input for Rs. 1000. He availed cenvat credit Rs. 103 on excise duty paid as mentioned in bill amount. At the time of payment manufacturer received dicount of Rs. 200 from the saler. Is the manufacturer is entitle to avail credit of duty attributable on Rs. 200? Kindly quote rule / judgement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on your support. Akhilesh Dubey Patna - Reply By sv bhasker - The Reply = Dear Mr Akhilesh, Manufacturer is eligible for credit attributable to discounted price of Rs 200/-as per Board circular No. 877/15/2008-CE dt 17.11.2008. - Reply By akhilesh dubey - The Reply = Dear Mr. Bhasker, Thanks for your quick reply. As per said circular 'but subsequently the supplier allows some trade discount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or reduces the price, without reducing the duty paid by him' and 'However, if the duty paid is also reduced, along with the reduction in price, the reduced excise duty would only be available as credit'. How it can be establish from the invoice that supplier allows trade discount or reduces the price without reducing the duty paid by the manufacturer. Regards, Akhilesh Dubey - Reply By sv bha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sker - The Reply = Sir, you may have to seek information from the manufactuerer "A" regarding the discounts and decide whether the case fits in the clarification of the Board. You will not know from the original invoice about the nature of discounts. - Reply By Pradeep Khatri - The Reply = Since Trade discount doesnot form part of consideration hence you will not be able to avail CENVAT credit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on this amount. - Reply By Sanjay Sharma - The Reply = CENVAT credit reversal not required when trade discount given subsequently- When credit is availed as per duty amount mentioned in invoice but subsequently trade discount is allowed or price is reduced and duty is not reduced, whether proportionate credit should be reversed. It is clarified that the entire amount of duty paid as sho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wn in the invoice would be available as credit in such cases, because as per rule 3 of Cenvat credit Rules, 2004 allows credit of duty paid by the input manufacturer (supplier in this case) and not duty payable by the said manufacturer. But this is subject to the condition that duty amount is not varied. If the duty amount is also reduced , then such reduced amount alone would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be admissible as credit. Further in this case it is advisable to the manufacturer to ensure that the supplier has not filed or claimed any refund on reduction of price. CBEC. Circular No. 877/15/2008-CX, Dt- 17/11/2008 Regards Sanjay Sharma - Cenvat credit on duty on discounted amount - Query Started By: - akhilesh dubey Dated:- 16-9-2011 Central Excise - Got 5 Replies - C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entral Excise - Discussion Forum - Knowledge Sharing, reply post by an expert, personal opinion Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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