CENVAT ON CAPITAL GOODS.

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

01 January 2010 WE HAVE ERRECT NEW PLANT FOR COST OF 250 CRORES AND PLANT & MACHINERY COST IS AROUND 180CRORE.

WE HAVE AVAILED CENVAT ON CAPITAL GOODS WHAT IS THE WRIGHT PROCEDURE :
EXAMPLE :-
CAPITAL GOODS PURCHASE 180 CRORE @8.24% EXCISE =14.832 CRORE
FIRST YEAR 50% I.E.=7.41 CRORE AVAILED.
NOW AS PER I.TAX RULE IF WE HAVE AVAILED CEVNAT ON CAPITAL GOODS THAN WE HAVE NOT CLAIMING THE DEPRECIATION.
THAN WHAT IS THE WRIGHT PROCEDURE FOR AVAILING BOTH BENEFIT ?

SANJAY JAIN

SANJAY JAIN (Expert)
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02 January 2010 The CENVAT Credit on capital goods and depreciation under Section 32 of Income Tax mutually excludes each other. Means no depreciation can be claimed on such amount which has been taken as credit in CENVAT Credit Rules,2004.

50% credit is allowed in the first year of receipt of capital goods and balance 50% credit is allowed in any subsequent year.

Though there are some tribunalâ€™s decisions in which dual benefits were allowed. In case you need the citations, , feel free to write sanjayinfbd@yahoo.com (M-09350048731) or visit, HNO. 2489/8,Faridabad(Haryana).