latest rule for revesal of cenvat credit on sale of old capi

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This query is : Resolved

CA.Rakesh Verma (Querist)

09 June 2010
Dear Sir,

PLs tell us
Latest rule for revesal of cenvat credit on sale of old capital goods
and also sale of computer after use of one year

Thanks and Reg.
RAkesh Verma
9810988880

CA. BIJENDER KR. BANSAL

CA. BIJENDER KR. BANSAL (Expert)

12 June 2010 Availment of Duty credit on capital goods:-
> _
> *Rule 4(2) of Cenvat Credit rules (2)(a) and 4(2)(b) , the manufacturer
> is permitted to take credit in the finacial year in which the capital
> goods are received , for an amount not exceeding 50 %of the specified
> duty paid on the capital goods.
> The balance credit is permitted to be taken 'in any finacial year
> subsequent to the fiancial year in which the capital goods were received
> in the factory of the manufacturer subject to the condition that the
> capital goods continue to be in the posseession of the manufacturer at
> the time of availing the balance credit.
>
> for example :- If the capital goods are received in the factory on say,
> 01-08-2008 , duty credit can be taken at any time between 01-08-2008 to
> 31-02-2009 - 50%.
> Balance on Next Fiancial year 2009-2010.
>
> *_Reversel of cenvat credit in case of sale capital goods after 3years
> or so.
> _
> CENVAT Rule 3 sub para (5) state that : When capital goods, on which
> CENVAT credits has been taken , are removed as such from the the
> factory the manufacturer of the fianl products shall pay an equal to
> the credit availed in respect of such capital goods.
>
> *Provided that *_(Insert vide notification no. 39/2007-C.E(N.T), dated
> 13-11-2007 w.e.f 13.11.2007_*
>
> I_*f the capital goods , on which CENVAT Credits has been taken, are
> removed after being used, the manufaturer shall pay an amount equal to
> the CENVAT credit taken on the said capital goods reduced by 2.5% for
> each quarter of the year from the date of taking the CENVAT Credit.
>

CA.Rakesh Verma

CA.Rakesh Verma (Querist)

14 June 2010 Thanks a lot Sir,

CA PRAMOD SARAOGI

CA PRAMOD SARAOGI (Expert)

15 June 2010 If the Capital Goods are removed in the 2nd year, what would be the amount of reversal of Credit.

CA. BIJENDER KR. BANSAL

CA. BIJENDER KR. BANSAL (Expert)

15 June 2010 If the capital goods are removed in 2nd year, first you have to claim remaining 50% , afterward,
You have to pay duty i.e reverse duty
Total Duty less 2.5% of total duty multiply no of quarter .

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