CENVAT Credit Problum......its urgent plz.

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Suraj Agarwal (Querist)
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07 May 2011 Mr. A purchased 25 computer system eligible as capital goods under the CENVAT Credit Rules, 2004, on 01.04.2009 paying a duty of Rs.2600 on each computer system. However, since these system become outdated, it sold 20 computer system out of 25 on 30.03.2011 at a residual value of Rs.2000 each. Detemine the amount of CENVAT credit required tobe reversed in the financial year 2010-11.

Please give your response with the supported working details.

Madhukar N Hiregange

Madhukar N Hiregange (Expert)
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09 May 2011 Accelerated credit of 10%, 8%, 5% per quarter is allowed to be retained for the 1st, 2nd and 3rd year. Balance would have tobe reversed

Suraj Agarwal

Suraj Agarwal (Querist)
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09 May 2011 Thanks Sir, but my problem is little but more. So please give guidence.

Suraj Agarwal

Suraj Agarwal (Querist)
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09 May 2011 Sir, I know the provision under law, but I want to know its applicability, i mean the manner of calcution. Because at this point, our suggested answer of ICAI & RTP for May 2011 is displayed a different opinions.

As per Suggested Answer :-

In first year [26000*10%]*4 quarter = 10400
In Second year [26000*8%]*4 quarter = 8320
Total 18720

But in RTP :-

In first year [26000*10%]*4 quarter = 10400
In Second Year [26000*10%]*4quarter = 10400
(Ist 50%) = [26000*8%]*4 quarter = 8320
Total 29120

So please clearify this point.

Thanks in Advance.