08 September 2011
Proviso to Rule 3(5) provides for levy of CENVAT under CENVAT Credit Rules at 2.5% rebate for every quarter on CENVAT availed on sale of second hand machinery
My query is - say a machine is bought for Rs. 10 Lakhs paying a duty of 10.30% i.e., Rs. 103,000. Now the machinery after being used for one year is sold, for say Rs. 15 Lakhs. Now should the CENVAT duty be Rs. 103000 Less 10% (2.5% * 4) or 10.30% of Rs. 15 Lakhs. Can any one throw light on this issue.
09 September 2011
I think you would have availed 50% of cenvat for 1st year(i.e. 103,000*50% = 51,500). So, 90% of 51,500 is to be paid. For example: The said machine was purchased on May 2010, and sold on May 2011. The 50% of credit was taken for the month of July 2010 and remaining for the month of April 2011. For the first 50% : Jul-Sep, Oct-Dec, Jan-Mar and Apr-Jun(part of quarter too considered) - 4 quarters so, 90%(100%-10%(2.5*4)) of 51,500 is to be paid For the remaining 50% : Apr - Jun - 97.5%(100-2.5*1) of 51,500 is to be repaid.
CAclubindia
