sale of fixed asset

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Anshul Jain (Querist)

26 August 2016 In case of liquidation, excise duty on sale of fixed asset have to be charged as it is done in case of scrap sale

Arun Kumar Singh

Arun Kumar Singh (Expert)

28 August 2016 If you have taken the cenvat credit then you need to pay excise duty on scrap value otherwise no need to pay duty.

Anshul Jain

Anshul Jain (Querist)

28 August 2016 but if plenty life of asset is remaining.. then also excide duty will be charged on scrap value and not on wdv or sale value? also output vat will be charged on amount + excide duty??

Rajannaidu

Rajannaidu (Expert)

19 September 2016 Rule 3(5A)(b) of Cenvat credit rule 2004 provides that If the capital goods are cleared as waste and scrap, the manufacturer shall pay an amount equal to the duty leviable on transaction value. it means you have to pay excise duty on scrap value.
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in other than scrap transaction, Rule 3(5A) (a) provides that if the capital goods, on which CENVAT credit has been taken, are removed after being used, the manufacturer or provider of output services shall pay an amount equal to the CENVAT Credit taken on the said capital goods reduced by the percentage points calculated by straight line method as specified below for each quarter of a year or part thereof from the date of taking the CENVAT Credit, namely:-
i. for computers and computer peripherals:
• for each quarter in the first year @ 10% ;
• for each quarter in the second year @ 8%
• for each quarter in the third year @ 5%;
• for each quarter in the fourth and fifth year @ 1%;
ii. for capital goods, other than computers and computer peripherals @ 2.5% for each quarter.
The proviso to this rule provides that if the amount so calculated is less than the amount equal to the duty leviable on transaction value, the amount to be paid shall be equal to the duty leviable on transaction value.

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