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It means Capital goods returned or sold without use (as it is)

 

When we purchase the capital goods, we take 50% cenvat.

In case we remove it as such, we take balance 50% cenvat also and then pay (reverse) the whole 100% cenvat

 

Hence it is said that in this case of capital goods, whole 100% cenvat is available in first year of purchase

 

 

This removal should be on cover of an invoice.

The buyer will be able to take credit of such amount

 

Exception:-

Service Provider can remove capital goods outside the factory for providing free warranty and need not pay cenvat

  1. Indirect Tax
  2. Cenvat Credit
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CA Maninder Singh
CA Maninder Singh is a Chartered Accountant for the past 6 years. He provides courses for Practical Accounts, Taxation and Efiling at teachoo.com.
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