Cenvat credit on motor vehicles

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Can Cenvat Credit On a motor vehicle (toyota Qualis) used by the director of a pvt. ltd co.for business purpose be availed? The motor vehicle is shown as a fixed asset in the Balance Sheet. Thanks in advance.

Replies (3)

Sir,

Cenvat Cr. admissable on capitalized fixed asset @ 50% but said cenvat cr. admissable only if depreciation amt. not claimed  

No CENVAT CREDIT can be booked as it motor vehicle is neither considered as CAPITAL GOOD OR INPUT.

However in 3 cases motor vehicle can be considered as capital good which are not applicable here as it is used by a director for official purposes in your case.

I totally agree with Mukesh. No CENVAT Credit can be booked as the mentioned motor car is not a capital asset as per the definition of Capital Asset nor it can be considered as Input & therefore no CENVAT Credit will be allowed. Only for specified service providers viz. 1) providing an output service of renting of motor vehicles 2) transportation of inputs & capital goods used for providing an output service & 3) courier agency service, the motor car can be considered as a Capital Asset & they are allowed to claim CENVAT Credit of duty paid on the same. As mentioned by you, the services of the director provided to a company (whether public or private) doesn't fall in any of the above mentioned category which allows the specified service providers to consider the motor vehicle as a Capital Asset. Hence no CENVAT Credit will be allowed in the above mentioned case.

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