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wholesaling and retailing  .  Tax is payable only on value added to commodities and on the services rendered.  VAT covers the value added at the level of Manufacturing.Cenvat has its origin in the system of VAT.

. “Output of first manufacturer becomes input for the second manufacturer. supplies it to a third manufacturer” till a final product emerges.  ... Tax purely based on selling price of a product has cascading effect..

     Computation of exact tax content Varying Tax burden Discouraging Ancillarisation (Automobile...) Increase cost of production Concession on basis of use isn’t possible . machinery etc.

It covers all the manufacturing sectors except some goods. It has been renamed as “Cenvat” w.f.e. 1-42000. 1-3-1994.    It allows a set-off the excise duties and the additional duties of customs on inputs against the duty liabilities on final products.e. MODVAT seceme was extended to capital goods w.f. .

For textiles the Cenvat scheme is optional.    Input duty relief scheme. It is designed to reimburse the user manufacturer with the duty paid on the inputs which have been absorbed as part of purchase price when buying the same for producing finished goods. . Cenvat scheme covers capital goods and all inputs barring motor spirit and high speed diesel.

.Finance Act 2000 unified rules for Capital goods and Inputs.

Moulds and dies Refractories and Refractory materials Tubes and pipes and fittings there of Pollution control equipment and Storage tank .      Components. spares and accessories of the goods.

  All goods (except HSD and petrol) used in or in relation to the manufacture of final products. It includes: ◦ Lubricating oils. packing material. greases. fuel etc. . ◦ Assessories of the final products ◦ Goods used as: Paints. cutting oils etc.

9.       Basic excise duty Special excise duty The additional duty of excise on Textile and goods The national calamity contingent duty Education cess on excise duty Services tax Education cess on taxable services paid on or after 10.2004 .

 Bond is an instrument by which the obligation to pay money is created expressly. ◦ Surety Bond ◦ Security Bond .

B-2: general bond for provisional assessment.      B-1: export of goods without payment of duty under Rule 19. . B-3: to obtain CE stamp on credit B-4: Bond for provisional release of seized goods B-8: obtaining goods at Nil or concessional rate of duty B-17: to be executed by EOU.

 Signing of Bond Acceptance of Bond  Release of Bond  .