Whether Cenvat credit shall be available in the following cases:
Air Conditioner Equipment falling under chapter 85 [capital goods]
Use in office situated inside the factory ………………………….
Use in factory For other purposes………………………………………..
5 Replies
CA Rachit Gupta
(Chartered Accountant)
(1315 Points)
Replied 13 October 2011
CCR can be availed in respect of AC used in the factory for any purpose...
but if it is used in the office, then no CCR can be availed
jim
(abc)
(309 Points)
Replied 13 October 2011
Thanks but even if the office is situated in the factory / production place?
praveen
(Chartered Accountant)
(6971 Points)
Replied 13 October 2011
To claim cenvat credit on Air Conditioners as capital goods, the following conditions are to be satisified
a) It must be for use in the factory
b) It must be used in manufacturing activity.
Hence, it is not just based on the location you use it but also for what purpose you are using it.
jim
(abc)
(309 Points)
Replied 13 October 2011
Thanks praveen,
Thus cenvat credit on Air Conditioners used in factory for purpose apart from production / manufacturing is not allowed?
and for office situated in factory, since it is not producing / manufacturing is not entitled for cenvat credit, am I right?
CA Rachit Gupta
(Chartered Accountant)
(1315 Points)
Replied 13 October 2011
Dear Jim
In the definition of capital goods, it no nowhere mentioned that capital goods must be used for production/manufacturing.
The only condition is that, it must be used in the factory of manufacturer. Hence purpose for which it is used is not relevant.
but if is used in the office, CCR is not allowed even if such capital goods is used for manufacturing purpose.
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