Cenvat on equipment for repairs & maintenance


Can anybody clarify the below......

We will capitalize the total value of plant & machinery by the date of Commercial operations declared. If any purchases are made afterwards for the improvement/modification/extension of existing plant & machinery, it will become an addition to the initial  machinery value and depreciation will be calculated accordingly.

If there are any purchases after the capitalization date towards repairs & maintenance, which will become revenue expenditure and not form part of fixed asset cost.


So the central excise duty on the purchases made before the COD (commercial operation date) will be claimed in RG23C @ 50% and remaining 50% will be claimed in next financial year. Same procedure will also be followed for Capital purchases made in the following financial years.


Now the question is, claiming of central excise on the purchases made for repairs & maintenance….


It has to be claimed in RG23C because RG23A is related to inputs used for manufacturing of final products. – pls clarify

Whether the claim in RG23C is @ 50% or 100%, because the spares or parts of machinery is a revenue expenditure and not capilitalised – pls clarify.

Can we claim 100% of duty in RG23C – pls clarify.


depending on the nature of role in manufacture, and the quantam of repair/parts used in repair, cenvat credit will be allowed in EG23C, 50/50 basis as per CCR2004,

however if tolls and impliments used during regular production role and routime upkeep of plant and machinery may not be taken in cenvat credit, unless the role of same is specified in production line and its mandatory to use the same for production line.

for details you can discuss the issue with your R/O and get clarification , as he is familier with your nature of working and roles of machines in production.

Associate Manager

Exactly, for classification between Capital Goods and Input Goods, the treatment given in accounting can not be deciding factor. Normally, spare parts of capital goods is capital goods for the purpose of Cenvat Credit even though the same has been treated as revenue exp. for accoutnign purpose. As very rightly suggested by Mr. Sharma, please get ensured about the nature and use of spare parts before taking 50% credit during current period.



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