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Excise on capital goods

neeraj (CA) (930 Points)

04 May 2012

What is the basis of classifying excise on goods as Excise on capital goods ?

Is it the tarrif heading of goods or is it depends on the the use of goods ?

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Sunil Kumar G (AGM Taxation) (373 Points)
Replied 04 May 2012

Please refer Rule 2 (a) of Cenvat Credit Rules, 2004 for definition of capital Goods. According to the definiton, the following are the capital goods,

a) "capital goods" means:-

(A)	the following goods, namely:-
	(i)	all goods falling under Chapter 82, Chapter 84, Chapter 85, Chapter 90, heading No. 68.05 grinding wheels and the like, and parts thereof falling under heading 6804 of the First Schedule to the Excise Tariff Act;
	(ii)	pollution control equipment;
	(iii)	components, spares and accessories of the goods specified at (i) and (ii);
	(iv)	moulds and dies, jigs and fixtures;
	(v)	refractories and refractory materials;
	(vi)	tubes and pipes and fittings thereof; and
	(vii)	storage tank, used-
		(1)	in the factory of the manufacturer of the final products, but does not include any equipment or appliance used in an office; or
		(2)	for providing output service;
(B)	motor vehicle registered in the name of provider of output service for providing taxable service as specified in sub-clauses (f), (n), (o), (zr), (zzp), (zzt) and (zzw) of clause (105) of section 65 of the Finance Act;

So Capital goods are defined and specified under the Rules. The above mentioned goods are only Capital goods and not all.

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narender (ao) (23 Points)
Replied 12 December 2012

if we transfer raw material to our unit (stock tranfer) then what is the rate charge (invoice calculation). Please reply

Sunil Kumar G (AGM Taxation) (373 Points)
Replied 13 December 2012

For Interunit transfer, you have to transfer with central excise duty. The duty is same as originally purchased. For example you purchase material at Rs. 1000 and duty charged as Rs. 103. If you transfer to other unit, you should charge duty same as Rs. 103 eventhough with different value.