Cenvat credit

a capital goods industry is purchasing raw materials which falls under chapter 82. will this raw material be termed as capital good ? if not , than why

Replies (8)

I think it is a capital good...

As per the difinition of capital goods, any goods falling under chapter 82 is capital goods subject to the conditions of useability.

It is nowhere mention in the definition the nature of industry using that goods.

Thanks

inputs of capital goods chapters if cleared with the manufactured goods then its classified under inputs, but the goods which remain in factory of production and does not get cleared from factory, are capital goods, 

 

such as electric motors when used in factory of production , are capital goods, but when fitted with product machines and cleared on invoice, its treated as inputs.

Dear Sachin,

Whether your purchase is inputs or capital goods will totally depends upon its usage & your industry nature to justify the same. Chapter headings are indicative & not conclusive. So analyse the usage & same should be justifiable

Regards

 

 

Raw materials used for manufacture of capital goods intended for clearance are inputs irrespective of chapter heading.

Dear Sachin,

 

we have to treat it like raw material because

(a) Raw materials used for manufacture of capital goods intended for clearance are inputs irrespective of chapter heading.

(b) if we will traeat it like capital goods than at the time of removal of goods manufactured, we need to pay duty on goods(capital goods) removed as such.  

Originally posted by : CA Green Agarwal

Dear Sachin,

 

we have to treat it like raw material because

(a) Raw materials used for manufacture of capital goods intended for clearance are inputs irrespective of chapter heading.

(b) if we will traeat it like capital goods than at the time of removal of goods manufactured, we need to pay duty on goods(capital goods) removed as such.  

As per the defination of inputs ,any goods /accessories cleared with the final produt shall be treated as inputs,hence in your case the rawmaterial used for manufaturing the capital goods shall be consider has inputs. Regards

I agree with Mr.Vishnu.  you are using that raw material to production of your final product.  Hence the raw material treated as input material of your final product.

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