Cenvat cedit reversal under rule 6 of CCR 2004/trading reversal, Central Excise

[Yatin Bhopi]

Dear all

We are manufacture and also doing trading activity from same premise, below are my queries related to reversal of cenvat credit under rule 6 of  CCR, 2004,.

1. Is we need to reverse this amount before 5^th of succeeding sale, If we opt for  option to pay @ 6% (rule (ii) 6) i.e. sale price -Cost of goods sold or 10% of cost of goods sold whichever is higher.
2. Is this rules applies In case of goods cleared as such (sale)
3. If yes then in case of inter unit transfer (not sale) of raw material what will be situation?
4. What will be interest rate if we not pay this amount in due date (rate mentioned in rule 6 is 24%   
5. If we reverse the proportionate cenvat credit as per below eg. Is it correct?  Total sale = 10,00,000/- (Normal sale + trading sale) Trading sale 1,50,000/- Total input credit 75000/-

Reversal amount will be 150000/1000000X75000 = 11250/-

Please guide

Posts / Replies

[Pradeep Khatri]

Trading is exempted activity.  In the event of availment of cenvat credit on such activities, there will be a requirement to reverse the proportionate  CENVAT credit or payment of an amount.

Non payment will attract statutory interest and penal actions.