Cenvat Credit on Capital goods

 

As the capital goods are sold after being put to use in the year of purchase itself so how much credit will be availed in the year of purchase 50% or 100%? Under Rule 3, of CENVAT Credit Rules 2004, it has been given that, if the capital goods are removed as such in the year of purchase 100% credit will be available in the year of purchase, but nothing is given if the goods are removed after being put to use in the year of purchase.

Replies (6)

Thank you brother. Then the remaining 50% can be claimed in subsequent year???? But as per rule, Capital goods must be in the possession to avail the remaining credit in the subsequent years.

Ok Thanks.

IF A COMPANY PURCHASE A OFFICE PREMISES AND PAY THE AMT IN INSTALLMENTS FROM A BUILDERS.

BUILDERS CHARGED SERVICE TAX ON EACH INSTALLMENT.

CAN WE TAKE CREDIT OF CENVAT ON SUCH INSTALLMENTS & HOW ?

Regarding capital goods received in the factory the Cenvat Credit Up to 50% can be taken in the year of purchase. however if the capital goods on which Cenvat Credit has been taken is removed after being used, The manufacture or provider of output service shall pay an amount equal to the Cenvat Credit taken on Said Capital Goods reduced by percentage points calculated by state line method as specified in the rules ( Rule 3 of the Cenvat Credit rule).

In your case it is at the rate of 2.5% for each quater.

 

is there any change in the availment of cenvat credit in for the FY 2010--11(AY 11-12)????????????????

X Ltd Bought machinery worth 1 lac on which he paid 10,000 as duty . He passed the following entry 

 

Machinery a/c Dr   100000

Cenvat a/c dr           5000

Cenvat (Next year) 5000

                    To   Bank                      110000

 

There was no excise duty payable. So the entire credit was constant, Then these goods were removed as such. Do we have to pay duty. Because we have no yet utilized that duty . 

 

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