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Cenvat on caipital goods

SATVEER (executive) (137 Points)

02 March 2013

Dear Sir,

i have purchase a machinary(Caipital goods) on dated 01/04/2012 and availed cenvat 50% for rs, 3000, and due to some reason, i had to sell that in july 2012, how much cenvat should be apply on that machine

thanks

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2 Replies

SAGAR (ARTICLED ASSISTANCE) (236 Points)
Replied 02 March 2013

Dear satveer,

as per excise notification no 39/2007, the manufactorer has to reverse the cenvat credit utilised on Capital goods decreased by 2.5% per quarter, which has been sold subsequently.

Example: A XYZ ltd purchased a machinary on dt 05may 2011, costing 10crores and excise duty paid was 4 lakhs. so input credit available and utilised for the FY 2011-12 was 2lakhs.

they sold the machinary on 06jun12. so the XYZ ltd has to reverse the input credit utilized 2lakhs Less 2lakhs*(2.5%*4) ie 1.8 lakhs

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priyanka (accountant) (74 Points)
Replied 05 March 2013

as per excise notification no 39/2007, the manufactorer has to reverse the cenvat credit utilised on Capital goods decreased by 2.5% per quarter, which has been sold subsequently. Example: A XYZ ltd purchased a machinary on dt 05may 2011, costing 10crores and excise duty paid was 4 lakhs. so input credit available and utilised for the FY 2011-12 was 2lakhs. they sold the machinary on 06jun12. so the XYZ ltd has to reverse the input credit utilized 2lakhs Less 2lakhs*(2.5%*4) ie 1.8 lakhs

As said by you Capital goods should be decreased by 2.5% per quarter, but you are decreasing with 4 month as example given by you, should it be multiply by 3 ?