Manufacturer can claim upto 50% Cenvat credit immediately on receipt of capital goods in

Factory- In case of Manufacturar

Premises- In case of Output Service Provider

Jobworker Premises- In case goods are sent directly to the job worker on the  direction of the manufacturer or the provider of output service,

 

Note:-

50% Cenvat can be claimed immediately on receipt of goods.

(Note this condition not there in case of capital goods used outside the factory for generating electricity for captive consumption)

 

Availing 50% in first year not compulsory

Assessee can claim less than 50% also in first year and balance in succeeding years

For example 25% in first year and 75% in second year

 

When to take balance 50% Cenvat

Remaining 50% Cenvat can be claimed anytime during next financial years provided capital goods are in possession of the manufacturer

This requirement of being in possession is not there in case of components, spares and accessories, moulds, tools and dies and refractories and refractory materials

 

Goods sent directly to jobworker

Sometimes, manufacturer/service provider purchase goos/capital goods and send them directly to jobworker for processing

Earlier,credit was available only when goods were ultimately received by factory of manufacturer/service provider premises

Now Cenvat is available to manufacturer/service provider  as soon as the goods are received by jobworker,

[Rules 4(1) and 4(2)(a)]

 

Time period for taking Cenvat on Capital Goods

Cenvat Credit can be taken within 1 year from date of Invoice/Bill/Challan (Documents mentioned in Rule 9 (1)

(Note:-Earlier the period was 6 months)

 

Whether Cenvat available if Capital Goods not purchased?

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Yes.

Credit in respect of Capital Goods, even if they are acquired either on lease, hire or loan agreement from a financing company.

 -ea-

Whether Cenvat can be claimed of Capital Goods if Depreciation claimed under Income Tax?

-a-

Yes.

But Depreciation can be claimed only on purchase price of fixed asset, not on the excise duty part

-ea-

  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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