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India : Govt. offers clarificantions- Cenvat |
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2004-7-22
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The Budget had given the option to textile units to remain under Cenvat and claim credit for it or opt out of it completely, the confusion had arisen on the procedures to be followed in dealings between units that are in Cenvat and those that are out of Cenvat.
On representation from various associations in the textile sector, the finance ministry clarified that under the new regime, textile units will have the choice to opt for excise exemption for certain product lines without claiming Cenvat credit and for paying excise duty and claiming Cenvat credit for other product lines.
The units also have the option of not paying excise duty and not claiming Cenvat credit for transactions with certain specified clients and paying excise duty and claiming credit on transactions with others in same product lines.
The ministry has also given the flexibility to units to claim excise exemption on coming under Cenvat on each transaction basis.
While providing textile units all flexibility, the finance ministry has said they must maintain appropriate verifiable accounts in this regard.
The ministry has also clarified the provisions in the circular, which had laid down guidelines for textile units to come into zero duty net. For coming in zero duty category it was mandatory that the unit had not taken input or output credit for inputs and capital goods. |
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