Reversal of cenvat credit

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Querist : Anonymous

Querist : Anonymous (Querist)

11 November 2013 What are the provisions when a machinary is sold on which CENVAT credit has been claimed.

CA Chandra Kishore Bajpai

CA Chandra Kishore Bajpai (Expert)
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11 November 2013 (1) If capital goods are cleared after use, an ‘amount’ payable by reducing the original Cenvat credit @ 2.5% per quarter i.e. 10% per
(2) If excise duty calculated on basis of transaction value of the old capital goods is higher, then ‘amount’ equal to that duty payable.

For example, capital goods were purchased on which Cenvat Credit availed was ` 1,00,000. These were cleared after use for five years. Then ‘amount’ to be paid (i.e. Cenvat credit to be reversed) is ` 50,000 (10% per year). However, capital goods were sold for ` 5,00,000 on which excise duty payableat current rate of 12.36% is 61,800. In that case, ‘amount’ payable will be ` 61,800.

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Querist : Anonymous

Querist : Anonymous (Querist)

11 November 2013 Sir can u pls state an example for better understanding.

Aashok Kumar Sharma online

Aashok Kumar Sharma online

(Expert)
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22 July 2025 https://docs.google.com/document/d/1h_IkrkKlakFdLJ081gLPJfMwN97SS0cfMk5-Nf5W5E8/edit?usp=sharing

Aashok Kumar Sharma online

Aashok Kumar Sharma online

(Expert)
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22 July 2025 https://docs.google.com/document/d/1h_IkrkKlakFdLJ081gLPJfMwN97SS0cfMk5-Nf5W5E8/edit?usp=sharing

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