Inter unit Transfer

[RAM SHARMA]

Dear Experts,

We have two unit. We want our 11 years old capital goods transfered to our other unit. One of our capital goods value is nil and we have not availed cenvat credit on these assets. What procedure should be adopt to transfer these assests through raised invoice or challan. What type of value showed in document because commercial value nil in our books. Please advice.

Thanks 

 

[YAGAY andSUN]

Dear,

You have to issue an invoice for removing of Capital Goods.  You would have not to pay the duty on transaction value of the goods as you had not availed the CENVAT credit on said capital goods.  On the invoice you would have to mention that you had not availed the CENVAT credit on the capital goods which are now being removed.  Any documentary proof would substantiate your claim that you had not availed the CENVAT credit.  You can also show the salvage value of these capital goods on the invoice.

Regards,

Team Yagay & SUN

[RAM SHARMA]

I have little doubt about the value of capital goods. My accounts book is showing nil value of these capital goods and we have to make consolidated balance sheet. In that case how can we show the value in our books. Can we transfer these capital goods on challan to our other unit. Please clarify.

Thanks

[YAGAY andSUN]

Dear Ram,

Challans are not specified documents for removal of goods.  You should issue invoice in this regard and specifically mention that on such captial goods you had not availed the CENVAT credit and also substantiate this aspect with documentary evidences, if any.

Regards,

Team YAGAY & SUN

(Indirect Tax Consultants)

[RAM SHARMA]

Dear Sir,

We are transfer our capital goods in our unit and presently its wdv (written down value) is nil. Can we transfer these capital goods on nil value.

Pl advice.

[YAGAY andSUN]

Dear Ram,

If possible (though not warranted), get  a certificate from Chartered Engineer and determine a nominal amount to pay the Central Excise Duty on the removal of capital goods.  Otherwise, you may removal it on NIL Value.

Regards

Team YAGAY & SUN

[Guest]

Dear Ram Sharma ji,

                         it is just simple you can treat it as scrap sale and do not show any effect in balance sheet (fixed assets) because your assets value is nil. so pass followings entry.

Customer A/c         Dr.

     To Sale  (Scrap Cap.)

     To Vat/Cst

     To TCS

Thanks

Vikram

     

AI Summary

Capital goods transfer: invoice required stating CENVAT credit not availed; valuation may be nominal, salvage, or nil. The transferring unit must issue an invoice for removal of capital goods and state that CENVAT credit was not availed, retaining documentary proof; challans are not adequate. For assets with nil written down value, parties may record a nominal or salvage value on the invoice-supported by a chartered engineer certificate-or alternatively remove on nil value, while preserving supporting records.