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Cenvat credit

CS RAJESH C.CHOUDHARY (ASSISTANT MANAGER) (14607 Points)

03 September 2011

whether we can avail cenvat credit on equipments used in sewage treatment plant if it is located within the excise bondary of the plant . Please suggest with proper reason and example

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5 Replies

Durga prasad Ambati (Taxation, Pursuing CA) (737 Points)
Replied 03 September 2011

Originally posted by : RAJESH CHOUDHARY
	whether we can avail cenvat credit on equipments used in sewage treatment plant if it is located within the excise bondary of the plant . Please suggest with proper reason and example

Dear Rajesh

We can avail the cenvat credit on goods are used for Manufacturing only, and taken on capital goods only,

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CS RAJESH C.CHOUDHARY (ASSISTANT MANAGER) (14607 Points)
Replied 03 September 2011

thanks durga prasad..

Ritu Sedwal (Chartered Accountant) (407 Points)
Replied 03 September 2011

Yes credit can be taken as capital expenditure...50% in the same year 50% in subsequent year.

CS RAJESH C.CHOUDHARY (ASSISTANT MANAGER) (14607 Points)
Replied 04 September 2011

thanks friend for the reply..

CA SOURAV KUMAR GANDHI (B.com (H), CA ) (133 Points)
Replied 07 September 2011

@ RAJESH

First you should check whether the goods i.e. equipment in your case is falling under definition of capital goods or inputs.
.Following goods are capital goods:

chapter 82, 84, 85, and 90 to the schedule to Central Excise Tariff Act, and goods falling under heading 6804, and 6805
Moulds, dies, jigs, and fixtures
refractory materials
pollution control equipments

Above Capital goods should be eligible only if

they are used in the factory by the manufacturer of final product.(relationship with manufacture is not mandatory).

they are used for providing output services (to be used in the factory is not compulsory)

they are used for generation of electricity and power for captive consumption (to be used in the factory is not compulsory)

Considering your equipment falls under above category and is capital goods, you cannot use it outside factory because it is not for generation of power or electricity or for providing output services.

Thanks

Sourav