Modvat on Lift to be used Material Movement

[Bhairob Chandra Bor]

Dear Sir,

we are going to install 2 no's of Lift , one for moving raw materials from Basement to ground 1st floor (shop floor). Supplier will charge excise duty as applicable. kindly advice for the following:

1. can we availed the modvat of this excise duty charged by the supplier?

2. can we availed the vat as a input tax ( if the supplier is from Haryana state and charged vat as per applicable rates)?

3. can we availed the service tax to be charged on installation of lift one?

3. what will be the case for 2nd lift which will be used for passenger lifting from ground floor to 3rd and 4th floor office?

All documentation like PO, Bills etc will be separate for both the cases.

Thanks and Regards,

BCB

[YAGAY andSUN]

Dear Bhairob Chandra Bor,

Generally, lifts, are in common parlance known as passenger lifts. But if it is an Industrial Lift, and specifically designed for carrying Goods/Materials/Machines, then, you may avail CENVAT credit and Input Tax Credit as per the provisions mentioned CENVAT credit Rules, 2004 and HVAT Act,2003 read with Rules made thereunder.

Thanks,

YAGAY and SUN

(Management and Indirect Tax Consultants)

[Madhukar N Hiregange]

The capital goods [ as specified]- lift is specified] are eligible for credit as long as used in the factory. It maybe used for carrying workmen or material. As long as it cannot be called an office equipment- in my view it is clearly eligible for credit.

We need to also keep in mind that for capital goods usage partially for manufacture of dutiable goods is enough to make it eligible.

[JAMES PG]

Lifts are generally classified in 84.28 of CE Tariff. All the goods classified under chapters 82,84,85 and are used in the factory are eligible for Cenvat credit as Capital goods. If the Office is also situated in factory premises, such credit is also eligible. ST credit on Erection and installation of lift is also eligible.Attention is also drawn to the CBEC Circular No 943/04/2011-CX, Dated : April 29, 2011 wherein it is clarified that:

Goods such as furniture and stationary used in an office within the factory are goods used in the factory and are used in relation to the manufacturing business and hence the credit of same is allowed

AI Summary

Cenvat credit for industrial lifts: material-handling lifts used in the factory permit credit and installation service tax input. A lift specifically designed and used to move materials within the factory qualifies as a capital good eligible for CENVAT credit and input tax credit where documentary records show distinct factory use; partial use for manufacture is sufficient. Service tax on erection and installation of such lifts is also creditable. Passenger lifts require assessment of whether their use is in relation to manufacturing-office-located lifts within factory premises may be treated as used in the factory and permit credit.