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after credit if capital goods reject

Manoj Nivdunge (Service) (75 Points)

24 November 2009

What is the producer if capital goods reject

Pls tell me

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10 Replies

Swati (CA) (76 Points)
Replied 29 November 2009

Hi Manoj!!

If the capital goods are being cleared as scrap, pay duty on the transaction value. Otherwise you can take credit equal to 2.5% per quarter of the year starting from the date on which credit was taken. The balance credit has to be reversed.

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Manoj Nivdunge (Service) (75 Points)
Replied 30 November 2009

Thank you Swati,

In this related any circular/Notification

Swati (CA) (76 Points)
Replied 01 December 2009

Dear Manoj,

The provisions are contained in the rule 3 of cenvat credit rules.

Gaurav (Audit Associate) (105 Points)
Replied 01 December 2009

There can be @ situations--

1. If the Capital Goods are Removed as such, then the CENVAT credit taken on the goods has to be reversed, i.i.e., reversal of credit taken on such goods.

2. If the Capital Goods are Used then,

(i) If removed as Scrap - Pay the Duty as per the Trasaction Value.

(ii) Otherwise, only credit 2.5% per quarter of the Input credit Recd. can be utilised rest all the credit availed in respect of this Capital Good has to be reversed.

Manoj Nivdunge (Service) (75 Points)
Replied 03 December 2009

Thank you

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Manoj Nivdunge (Service) (75 Points)
Replied 07 December 2009

Originally posted by :Gaurav
"	There can be @ situations-- 1. If the Capital Goods are Removed as such, then the CENVAT credit taken on the goods has to be reversed, i.i.e., reversal of credit taken on such goods. 2. If the Capital Goods are Used then, (i) If removed as Scrap - Pay the Duty as per the Trasaction Value.ii) Otherwise, only credit 2.5% per quarter of the Input credit Recd. can be utilised rest all the credit availed in respect of this Capital Good has to be reversed.	"

Thank you for your reply, Please tell me abt Transaction value

Gaurav (Audit Associate) (105 Points)
Replied 07 December 2009

Transaction Value:

When the goods are sold,

i. Price actually payable for the goods.

ii. Any amt which the buyer is liable to pay to the assessee or on behalf of the assesse

iii. Amount payable whether at the time of sale or at any thereafter.

iv. Amount payable by reason or in connection with the sale.

But Taxes should not be included like- VAT, excise, etc but including any amt paid or payable for Warranty, Commission, etc.

Manoj Nivdunge (Service) (75 Points)
Replied 08 December 2009

Thank you

In Transaction value transportation & packing charges include or not

Gaurav (Audit Associate) (105 Points)
Replied 10 December 2009

Dear Manoj,

In the Transaction value any amt recived or recievable from the party will be included.

But in the Transaction Value as per Rule 5 -Place of delivery different from the place of Removal transportation cost till the place of Delivery will not be included and for the coming back of Vehicle will be included. and also if Average freight is charged it will not be included.