Reversal of cenvat credit
This query is : Open
Querist : Anonymous
Querist :
Anonymous
(Querist)
11 November 2013
What are the provisions when a machinary is sold on which CENVAT credit has been claimed.
11 November 2013
(1) If capital goods are cleared after use, an ‘amount’ payable by reducing the original Cenvat credit @ 2.5% per quarter i.e. 10% per
(2) If excise duty calculated on basis of transaction value of the old capital goods is higher, then ‘amount’ equal to that duty payable.
For example, capital goods were purchased on which Cenvat Credit availed was ` 1,00,000. These were cleared after use for five years. Then ‘amount’ to be paid (i.e. Cenvat credit to be reversed) is ` 50,000 (10% per year). However, capital goods were sold for ` 5,00,000 on which excise duty payableat current rate of 12.36% is 61,800. In that case, ‘amount’ payable will be ` 61,800.
(2) If excise duty calculated on basis of transaction value of the old capital goods is higher, then ‘amount’ equal to that duty payable.
For example, capital goods were purchased on which Cenvat Credit availed was ` 1,00,000. These were cleared after use for five years. Then ‘amount’ to be paid (i.e. Cenvat credit to be reversed) is ` 50,000 (10% per year). However, capital goods were sold for ` 5,00,000 on which excise duty payableat current rate of 12.36% is 61,800. In that case, ‘amount’ payable will be ` 61,800.
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Querist : Anonymous
Querist :
Anonymous
(Querist)
11 November 2013
Sir can u pls state an example for better understanding.
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