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?
CENVAT Credit Ineligible for Capital Goods Used Exclusively in Exempted Solar Equipment Manufacturing; Depreciation Recommended Instead. A query was raised regarding the eligibility to claim CENVAT credit on excise duty paid for capital goods used in manufacturing solar equipment, which is exempt from excise duty. The discussion clarified that if capital goods are used exclusively for manufacturing exempted goods, CENVAT credit cannot be claimed. Instead, depreciation should be claimed under Income Tax provisions. This guidance was provided in the context of supplies made to solar power generation projects and other projects, where CENVAT reversal is not required for inputs used in solar equipment supplied to solar power generation projects. (AI Summary)
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