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Complex case of passing cvd benefit to the customer.

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dhiru

Executive

26 Points Posted on 27 September 2016

We are importing equipment from Germany & China and We have three segment of business i.e. Direct Sales , Rental & Used Equipment Sale.

So wants to know that can we pass CVD benefit of Capitalised equipment when we are selling it under used equipment category to the customers.
For Ex:- We imported equipment , capitalised it for rental business while not claimed CVD benefit and later after 5 months, we want to sell it under "Used Equipment" segment to the customer.

So, in Used Equipment segment, can we pass CVD benefit to the customer since customer is insisting that you can pass it to us because you have not claimed.

We are registered with Central Excise and in Direct Sales segment, we pass it to the customer.

Regards,

Dhiru

Replies (1)

Arun Kumar Singh

GST Advocate

13166 Points Posted on 15 October 2016

You need to registered as a trader in central excise then you can pass the CVD and SAD. In second situation if you have rentout the capital goods and pay the service tax on it then you can utilized the cenvat credit of capital goods for payment of service tax. In last situation at the time of sale of capital goods you need to reverse the cenvat credit @ 2.5% per quarter.