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Cenvat credit on motor vehicles

subham saharia (Entrepreneur) (41 Points)

01 April 2014

Can Cenvat Credit On a motor vehicle (toyota Qualis) used by the director of a pvt. ltd co.for business purpose be availed? The motor vehicle is shown as a fixed asset in the Balance Sheet. Thanks in advance.

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3 Replies

Harendra Kumar (Tax Advisor ) (1326 Points)
Replied 01 April 2014

Sir,

Cenvat Cr. admissable on capitalized fixed asset @ 50% but said cenvat cr. admissable only if depreciation amt. not claimed

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mukesh (CA FINAL) (148 Points)
Replied 01 April 2014

No CENVAT CREDIT can be booked as it motor vehicle is neither considered as CAPITAL GOOD OR INPUT.

However in 3 cases motor vehicle can be considered as capital good which are not applicable here as it is used by a director for official purposes in your case.

Pratik Mahajan (B.Com M.Com CA Final CS Professional) (54 Points)
Replied 02 April 2014

I totally agree with Mukesh. No CENVAT Credit can be booked as the mentioned motor car is not a capital asset as per the definition of Capital Asset nor it can be considered as Input & therefore no CENVAT Credit will be allowed. Only for specified service providers viz. 1) providing an output service of renting of motor vehicles 2) transportation of inputs & capital goods used for providing an output service & 3) courier agency service, the motor car can be considered as a Capital Asset & they are allowed to claim CENVAT Credit of duty paid on the same. As mentioned by you, the services of the director provided to a company (whether public or private) doesn't fall in any of the above mentioned category which allows the specified service providers to consider the motor vehicle as a Capital Asset. Hence no CENVAT Credit will be allowed in the above mentioned case.