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Modvat- Cenvat on material

Hi all i am new to the module.

I just wanted to know some details about the cenvat concept.

I know cenvat is basically used to avoid double taxation on an item.I just wanted to know how does the calculation and posting of cenvat and other related taxes are posted in system.

If buyer purchased good for 100 RS with BED 16% i.e 16 Rs is the BED . now after processing the cost of the product comes out to be 150.

Now in this case what is the CENVAT.How much amount do manufacturer will get back.

Thanks and regards,


Former Member
Former Member replied

Hi Ashutosh,

Welcome to MM module, see there are two type of excise is levied on the product 1. which can be claimed 2. which can not be claimed and then later on it gets added to the material value. In you case if BED is 16% then you can claim 16 rs if its claimable in SAP knowns as Deductible and if its not then material will cost you of rupees 116.

Now after manufacturing yo said your cost of material is 150 rs now you calculate the 16% on that which comes 27 rs so at the time of sale you get this amount of duty from your customer. So Govt rules states that whatever duty you have paid at the time of purchase you can get set off from the duties at the time of sale. so in your case as you have already paid rs 16 and 27-16=11rs are supposed to be paid by you to goverment.

Following are kinds of excise registers

RG23A -For rawmaterials

RG23C-for Capital goods

RG1-finished goods

The above are movements of excisable goods maintained in a plant.


This is movements of excisable goods maintained in a depot.

PLA-Personal ledger account

This is the bank account from which you transfer any money owing to the excise authorities.

Register RT-12

This is a monthly report that summarizes the CENVAT and PLA information from the other registers.

Part1 entry-

it will depict quantity or the volume of goods movement

Part2 entry-

accounting entries will be captured

Hope this would have sloved you r query



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