As per Rule 2(k), of CENVAT Credit Rules, 2004:

  “Input” means all goods

  • Used in factory for manufacture of final product
  • Provided free of cost with the finished products (like accessories or goods supplied free under warranty )
  • Goods used for generation of electricity or steam for captive use
  • Goods used for providing any output service;



However it does not include the following

  • Light diesel oil, high speed diesel oil or motor spirit(petrol)
  • Capital goods
  • Motor vehicles
  • Goods for personal use of employees

            (like food items, goods used in guesthouse, club, recreation facility)

  • Goods which have no relationship whatsoever with the manufacture of a final product.
  • Goods used for construction /execution of work contract of building or civil structure or laying foundation for support of Capital Goods of building However, work contractor can claim input of the same in certain cases


Capital Goods used as parts or components in the manufacture of a final product,whether Input available?

Yes,In this case, these capital goods are regarded as Inputs


Conditions to be satisfied to claim Inputs

  • It must be used in factory
  • Final product must be dutiable
  • It must not be covered in exceptions

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CA Maninder Singh

CA Maninder Singh is a Chartered Accountant for the past 13 years. He also provides Accounts Tax GST Training in Delhi, Kerala and online.