CA Mukesh Jain S (Chartered Accountant in Practice) (692 Points)
03 December 2010A Co., is going for demerger & it has already availed cenvat credit on capital goods. Now the ownership of some of the capital assets is changing from demerged Co., to Resulting Co.,. There is no physical movement of assets.
In this case whether the demerged Co., needs to reverse the cenvat Credit on Capital assets already Availed ?
Please reply me urgently.
CA Mukesh Jain S
(Chartered Accountant in Practice)
(692 Points)
Replied 03 December 2010
Please reply me taking into consideration the amended Rule 3(5) of the cenvat Credit rules
U S Sharma
(glidor@gmail.com)
(21063 Points)
Replied 04 December 2010
if the resulting company has excise registration then issue invoice in favor of resulting company and they can take credit on strength of that again.
yes, you have to pay excise on the demerged assets on which cenvat credit is taken.
CA Mukesh Jain S
(Chartered Accountant in Practice)
(692 Points)
Replied 04 December 2010
No i feel Rule 10 & Rule 3 (5) are mutually exclusive. In this case Rule 10 applies
U S Sharma
(glidor@gmail.com)
(21063 Points)
Replied 04 December 2010
| Originally posted by : CA Mukesh Jain S | ||
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A Co., is going for demerger & it has already availed cenvat credit on capital goods. Now the ownership of some of the capital assets is changing from demerged Co., to Resulting Co.,. There is no physical movement of assets. In this case whether the demerged Co., needs to reverse the cenvat Credit on Capital assets already Availed ? Please reply me urgently. |
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As the case is of part transfer, rule 10 can not be applied, if the premises as well as whole capital goods in that premises including inputs are going to transfer then rule 10 is applicable.
also to avail rule 10, it needs supervision of range office or AC/DC as the case may be depending on values .
CA Mukesh Jain S
(Chartered Accountant in Practice)
(692 Points)
Replied 04 December 2010
Thanks Usha. Demerger under the IT Act means the t/f of Whole undertaking & we are Transferring the U/T as a whole. So i feel Rule 10 applies. One of my friend has also given the same opinion.
Yes. it requires the supervision of AC/ DC
U S Sharma
(glidor@gmail.com)
(21063 Points)
Replied 04 December 2010
if the unit (registration wise)is transfered in whole then surely u can avail rule 10,
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Survey, Search and Seizure under Income Tax Act 1961
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