Cenvat credit on capital goods

Hi,

Cenvat Credit can be availed on capital goods. But the credit should be taken in installments.

As per The Cenvat Credit rules,
"The credit shall be taken only for an amount not exceeding 50% of the duty paid on capital goods in the same financial year in which capital goods is received.
The balance 50% shall be taken in the subsequent financial year.
However, in case of small scale manufacturer the credit of 100% of the duty can be taken in the year of receipt of capital goods"

First one is right

1st one is right

IN CASE OF UTILISATION  OF CENVAT CREDIT IN CAPITAL GOODS FOLLOWING RULE CAN BE EXPLAIN BY ME WITH THE HELP OF EXAMPLE

 SUPPOSE  MR X PURCHASE A PLANT @ 1250000

 so if credit of ccr suppose RS.12500

ccr book full  RS12500 in the books in the year of puchase

and pass the following entry

[  A ]

plant a/c dr 1250000

 to cash 1237500

to ccr  12500 

 and at the time of utilasation

B

CCR (only 50%) DR 6250

to CCR            6250

so my conclusion is that the CCR on capial goods book full but utlise  50% in the yr of purcahase and balance in the subsequent yr

As per The Cenvat Credit rules, "The credit shall be taken only for an amount not exceeding 50% of the duty paid on capital goods in the same financial year in which capital goods is received. The balance 50% shall be taken in the subsequent financial year. However, in case of small scale manufacturer the credit of 100% of the duty can be taken in the year of receipt of capital goods"

Small scale manufacturer

Exemption to first clearances of specified goods upto a value of Rs. 1 Crore, if CENVAT facility  not  availed  and exemption to goods captively consumed- Notfn. No. 8/03-CE dated 1.3.2003.

Sir, if we take 50% canvet of capital goods in March, next year, after how many days will Canvet taken.

Sir Please tell me,

Cenvat Credit on Capital Goods Can claim in how many years..

2 Years or 3 Years

Originally posted by : JItendra Singh
	Sir, if we take 50% canvet of capital goods in March, next year, after how many days will Canvet taken.

You can take another 50% on April onwards.

As per rule take 1st 50% on current finanial year and balance 50% on subsequent financial year.

1st opinion is correct

dear nisha sharma

1st year 50%

THANK YOU SIR FOR EXPLANING RULES OF CENVAT CREDIT. BUT CAN YOU EXPLAIN THIS EXAMPLE IN DETAILS FROM ACCOUNTING PROSPECTIVE.

GIVE MORE DETAILS ABOUT OF YOUR EXAMPLE SHOWED IN YOUR REPLY

Respected sir,

Please let me know if we file ER-1 after due date what will the late filing penalty...?