Clarification regarding CENVAT Credit- Transit Sale
Notification No. 08/2015-CE(NT) dated 1st March, 2015 has amended Rule 11(2) of the Central Excise Rules, 2002 to provide that if the goods are directly sent to any person on the direction of the registered dealer, the invoice shall also contain the details of the registered dealer as the buyer and the person as the consignee, and that person shall take CENVAT credit on the basis of the registered dealer’s invoice. Similar provisions are also inserted for sale by importer.
This amendment raises question on fate of Circular No 96/7/95-CX dt 13-2-1995, 137/48/95-CX dt 18-7-1995 and 218/52/96-CX dt 4-6-1996, in so far as these circulars pertain to availment of credit on strength of original manufacturer’s invoice where a dealer including an indenting dealer has procured order and has arranged direct transport of the goods from the premises of the manufacturer to the premises of the consignee.
To remove doubts, CBEC has issued Circular No. 1003/10/2015-CX dated 5th May, 2015 to clarify that the purpose of amendment is to allow an additional facility for direct transport of goods from the manufacturer or the importer to the consignee where the consignee avail the CENVAT Credit on the basis of the Cenvatable invoice issued by the registered dealer or the registered importer. It is further clarified that provisions of circulars issued in 1995 & 1996 mentioned supra would continue to apply.
This circular also clarifies that the new provision are meant to provide additional facility to registered dealer or importer for direct dispatch of goods from the manufacturer to the consignee. They do not withdraw any past facility.Note:
Now Indirect Tax updates are just one touch away. DYKS Team has launched android app "IDT-GST" which can be downloaded freely from play store. By using app you can also access old Do You Know Series.