How CENVAT reduces tax burden of end user

CENVAT is the new name for MODVAT and are related to central excise. A product reaches the end user after undergoing many manufacturing activities. To reduce the tax burden of the end user, the Govt of India introduced CENVAT.Simply put, CENVAT is the tax on value addition on the goods manufactured according to Central Excise & Customs Act Definition. By value addition, we mean additional services/activities that convert input into output, and the output is newly recognised as excisable good. Cenvat stands for centralized value added tax charged by the central government.