Cenvat credit on Softwares as capital goods

“My query is whether 'Software' is a capital goods under CENVAT credit rules.”

Yes, it gets a treatment of “capital goods”, if the economic benefits from the said software extends to more than one year.    Else, it will be treated as a revenue expenditure like in the case of software purchased and put to use for Anti Virus ( “ Kaspersky”, “Trends” which will serve for only 12-months period.).

”If YES, then cenvat credit of service tax paid on it 50% in the current year and 50% in next year.”   Yes, here also you are right.

”And whether Output service provider can avail Cenvat Credit on software used in office like ERP or Tally etc”  This query needs some more clarity from your end.

software falls under chapter 85 of the first schedule of the excise tariff act so its a capital goods as per cenvat credit rules 2004.

As per cenvat credit rules only 50% of the credit can be taken in the same financial year when the goods were received and remaining 50% in the subsequent fiannacial year.

Capital goods can be treated as an input if it falls under the defination of inputs in Rule 2(k) of the cenvat credit rules and the only condition is it must be used in manufacturing or providing of output services.

in that case 100% can be taken in the same financial year.

Hi all,

Whether service tax input can be taken on software purchased by a software developement industry? If yes whether it can be taken 50% or 100%?