What is Central Value-added Tax and how it is
configured?
What is CENVAT (Central Value-added Tax) and how it is configured?
Before I am going to explain what is cenvat, you have to under stand the
Indian tax Central Excise Duty (BED). It is called as basic excise duty. Every
manufacturer is liable to pay the excise duty in various kinds namely Basic
Excise Duty, Special Excise Duty, Additional Excise Duty etc.,
Just think over a product which is reached to a end user, how many
manufacturing activities are done. So to reduce the tax burden of the end user,
the Govt. of India introduce the MODVAT scheme which is now called CENVAT
scheme.
Based on this, if any manufacturer purchased a material, which is duty paid,
and if it is used for his further manufacturing activity, he can avail this as
credit in his book based on the Central Excise Invoice. At the time of selling
his manufactured goods, he is liable to pay the excise duty. He can adjust the
credit which he has taken into his book and pay the rest. For example:
CENVAT availed at the time purchased various goods Rs.20,000 (EXcise
duty alone)
CENVAT payable for his product at the time sales Rs.25,000
He will pay only Rs.5000 through cash deposit in PLA.
This customizing are in SAP CIN Module. If you are having the CIN CD, go
through.
Good Explanation. In addition to this. The CENVAT means, Tax on Value
Addition on the goods manufactured according to Central Excise & Customs Act
Difinition. Here the value addition means the Additional Services/Activities
etc. which converts the Input in to Output, and the output is newly recognised
as per the this act as Exciseble goods. Like this the discussion
is goes on for definition.
In 4.7 SAP version, there is no CIN version seperately, it is available with
Standard SAP it self.
