Inputs eligible for CENVAT



Credit will be available of duty paid on

(a)   raw materials (excluding some items )

(b)  Material used in relation to manufacture like consumables etc.

(c)   packaging materials

(d)  paints


  • Inputs should be used in or in relation to manufacture-CENVAT

Credit is available only on inputs used in or in relation to manufacture of a final product.


  • Inputs may be used directly or indirectly

The inputs may be used directly or indirectly in or in relation to manufacturer. The inputs need not be present in the final product


  • No credit on HSD or PETROL

Duty paid on high speed diesel and motor spirit (petrol) is not available as cenvat credit even if these are used as raw materials.


  • No credit if final product exempt from duty

No credit is available if final product is exempt from duty (rule 57AD (1)) if manufacturer manufactures more than one product it may happen that some of the products are exempted from duty. In such cases, duty paid on inputs used for manufacturing of exempted product cannot be used for payment of duty on other products which are not exempted from duty.




  • Credit on basis of specified documents

Credit is to be availed only on the basis of specified documents as a proof of payment of duty on inputs.


  • Credit available instantly

Credit of duty on inputs can be taken up instantly i.e. as soon as inputs reach the factory. In case of capital goods 50% credit is available in current year and balance 50% in subsequent financial year


  • No cash refund

In some case it may happen that duty paid on inputs may be more than duty payable on final products. In such cases, though the CENVAT credit will be available to manufacturer he cannot use the same and the same will lapse


  • One to one correlation not required

CENVAT rules do not require input output correlation to be established.


  • CENVAT available only if there is manufacture-

CENVAT on inputs is available only if the process amounts to manufacture.  Otherwise, CENVAT is not available.

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