SAD on Capital Goods

[Sharad Sonawane]

Dear Sir,

 

We have Purchased Capital Goods from First Dealer / Second Stage Dealer he shown SAD on his Invoice can we take Full Credit on SAD or 50 percent any notification on full credit SAD

AI Summary

Full Credit on SAD for Capital Goods: 100% Credit Allowed Under Cenvat Credit Rules Upon Receipt in Factory. A query was raised regarding the eligibility of taking full credit on Special Additional Duty (SAD) for capital goods purchased from a dealer. One response suggested that only 50 percent of the credit can be utilized, even if 100 percent is recorded in the books. Another response argued that 100 percent credit of SAD can be availed and used for excise duty payment, explaining that SAD acts as a substitute for sales tax. It was further clarified that, according to Cenvat Credit Rules, full credit is allowed immediately upon receipt of the capital goods in the manufacturer's factory.