CENVAT Credit on input used for New Product development Department, Central Excise

[Pradeep Jain]

Sir,

We are having new product development department , where in inputs purchased  consumed for , different trial testing and innovation purpose , we do captalised the input cost incurred  on this account.

The said product developed may be  introduced in to the market within 1-2 year.

Now querry is that:-

Are we entitled to avail CENVAT credit on the purchase of inputs used for the future development of new product. ?

Regards

 

Pradeep Jain

 

Posts / Replies

[Vijay Chitte]

Yes, you can take cenvat credit immidiately, Beaing as a manufcturer, no need to wait when product is introduced, Further, only inputs (goods) used for providing taxable services eligible, Cenvat credit reversal is required even if the input goods are written off fully or partially in books of account.

[Pradeep Khatri]

Research and Development forms part and parcel of manufacturing, hence, it is verly well incorporated in the definition of inputs under Cenvat Credit Rule, 2004