Canvat Credit

[Arti Gupta]

As solar equipment is exempt from excise duty. Supplies are being made for solar equipments to solar power gneration projects as well as other than solar power generatin projects by a manufacturer.

Further as per Rule 6(vii) of CCR, 2004, Cenvat reversal is not required for input used in solar equipments supllied to Solar power gneration projects

Question is whether credit of Excise duty paid on capital goods can be availed?

[YAGAY andSUN]

If the capital goods are used exclusively for manufacturing of exempted goods, then, CENVAT credit on Capital goods cannot be claimed.  Please claim depreciation as per Income Tax Provision on such Capital Goods.

AI Summary

Cenvat credit on capital goods: not admissible where goods are used exclusively to manufacture exempted solar equipment. Where capital goods are used exclusively in the manufacture of exempted solar equipment, CENVAT credit on those capital goods is not available; instead depreciation should be claimed under income tax provisions. Note also that Rule 6(vii) CCR, 2004 exempts inputs for solar equipment supplied to solar power projects from cenvat reversal.