Become a Certified GST Practitioner this February. Register Now!

Cenvat credit

SACHIN garg (ca ) (181 Points)

23 October 2011

a capital goods industry is purchasing raw materials which falls under chapter 82. will this raw material be termed as capital good ? if not , than why

Reply
Follow
Share

8 Replies

CA Rachit Gupta (Chartered Accountant) (1315 Points)
Replied 23 October 2011

I think it is a capital good...

As per the difinition of capital goods, any goods falling under chapter 82 is capital goods subject to the conditions of useability.

It is nowhere mention in the definition the nature of industry using that goods.

Thanks

Upgrade to CAclubindia Pro. Subscribe Now!

U S Sharma (glidor@gmail.com) (21063 Points)
Replied 24 October 2011

inputs of capital goods chapters if cleared with the manufactured goods then its classified under inputs, but the goods which remain in factory of production and does not get cleared from factory, are capital goods,

such as electric motors when used in factory of production , are capital goods, but when fitted with product machines and cleared on invoice, its treated as inputs.

CA Nitin Karmalkar (Senior Associate) (70 Points)
Replied 24 October 2011

Dear Sachin,

Whether your purchase is inputs or capital goods will totally depends upon its usage & your industry nature to justify the same. Chapter headings are indicative & not conclusive. So analyse the usage & same should be justifiable

Regards

CA Unnikrishnan Nair N (Chartered Accountant) (2083 Points)
Replied 24 October 2011

Raw materials used for manufacture of capital goods intended for clearance are inputs irrespective of chapter heading.

CA Green Agarwal (Financial Functional Consultant) (35 Points)
Replied 24 October 2011

Dear Sachin,

we have to treat it like raw material because

(a) Raw materials used for manufacture of capital goods intended for clearance are inputs irrespective of chapter heading.

(b) if we will traeat it like capital goods than at the time of removal of goods manufactured, we need to pay duty on goods(capital goods) removed as such.

Upgrade to CAclubindia Pro. Subscribe Now!

Ankit Tantia (B.com ( Hons.) FCA DISA (ICAI)) (222 Points)
Replied 24 October 2011

Originally posted by : CA Green Agarwal
	Dear Sachin, we have to treat it like raw material because (a) Raw materials used for manufacture of capital goods intended for clearance are inputs irrespective of chapter heading. (b) if we will traeat it like capital goods than at the time of removal of goods manufactured, we need to pay duty on goods(capital goods) removed as such.

vishnu (job) (75 Points)
Replied 28 October 2011

As per the defination of inputs ,any goods /accessories cleared with the final produt shall be treated as inputs,hence in your case the rawmaterial used for manufaturing the capital goods shall be consider has inputs. Regards

R P Ananthakumar (Sr. Officer - Central Excise/Cash) (514 Points)
Replied 02 November 2011

I agree with Mr.Vishnu. you are using that raw material to production of your final product. Hence the raw material treated as input material of your final product.