CENVAT Credit Problum......its urgent plz.

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This query is : Resolved

Suraj Agarwal (Querist)

07 May 2011 Mr. A purchased 25 computer system eligible as capital goods under the CENVAT Credit Rules, 2004, on 01.04.2009 paying a duty of Rs.2600 on each computer system. However, since these system become outdated, it sold 20 computer system out of 25 on 30.03.2011 at a residual value of Rs.2000 each. Detemine the amount of CENVAT credit required tobe reversed in the financial year 2010-11.

Please give your response with the supported working details.

Madhukar N Hiregange

Madhukar N Hiregange (Expert)

09 May 2011 Accelerated credit of 10%, 8%, 5% per quarter is allowed to be retained for the 1st, 2nd and 3rd year. Balance would have tobe reversed

Suraj Agarwal

Suraj Agarwal (Querist)

09 May 2011 Thanks Sir, but my problem is little but more. So please give guidence.

Suraj Agarwal

Suraj Agarwal (Querist)

09 May 2011 Sir, I know the provision under law, but I want to know its applicability, i mean the manner of calcution. Because at this point, our suggested answer of ICAI & RTP for May 2011 is displayed a different opinions.

As per Suggested Answer :-

In first year [26000*10%]*4 quarter = 10400
In Second year [26000*8%]*4 quarter = 8320
Total 18720

But in RTP :-

In first year [26000*10%]*4 quarter = 10400
In Second Year [26000*10%]*4quarter = 10400
(Ist 50%) = [26000*8%]*4 quarter = 8320
Total 29120

So please clearify this point.

Thanks in Advance.