Cenvat

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CA.Ritu Agarwal (Querist)

04 January 2014 Whether Excise duty charged on repair of Capital goods should also be taken as 50% for current year and balance in next year.

CS,CA F,Numrologi TusharSampat

CS,CA F,Numrologi TusharSampat (Expert)

04 January 2014 First tell me where and how do you pay excise duty on repairing of capital goods?

As excise duty is paid on manufacture of goods as per excise act.

You must be talking about service tax paid?

CA.Ritu Agarwal

CA.Ritu Agarwal (Querist)

04 January 2014 The company is producing HDPE Fabrics. we get cenvat credit on input .i.e raw material. Again we also get CENVAT CREDIT on Machinery purchased. 50% in current year and balance in next year. sometimes we may need some repairs or some spare parts are added to it in which we need to pay excise duty..how to account for that.

CS,CA F,Numrologi TusharSampat

CS,CA F,Numrologi TusharSampat (Expert)

04 January 2014 If spare parts are purchased which forms part of exisitng capital goods then excise paid on it is available for cenvat credit.

If repair work is done and on it service tax is paid is also available for cenvat credit as per cenvat credit rules 2004.

If u refer Bangars book for ca final all such entries have been given.

CA.Ritu Agarwal

CA.Ritu Agarwal (Querist)

04 January 2014 That is fine .now my question is whether we can take full credit in first year or 50:50

CS,CA F,Numrologi TusharSampat

CS,CA F,Numrologi TusharSampat (Expert)

04 January 2014 You have to take 50 in year 1 of purchase of spares and bal in next year as per existing cenvat credit rules,2004.

CA.Ritu Agarwal

CA.Ritu Agarwal (Querist)

04 January 2014 but spares are consumable items. consumed in one year then ???

CS,CA F,Numrologi TusharSampat

CS,CA F,Numrologi TusharSampat (Expert)

04 January 2014 then refer guidance note on excise duty by icai for its treatment.