Cenvat Credit and Depriciation

[Mehul Pandya]

Sir,

My query is regarding capital goods cenvat and Depreciation calculation.

For example I am buying one capital goods of ₹ 1000/- + ₹ 15 Excise Duty.

Hence Can I avail cenvat credit of ₹ 7.5 in the current year and balance in the next year as far as CCR,2004 concerns whereas I will claim depreciation only on ₹ 1000/- i.e. excluding duty amount. Is this allowable from the both IT and CCR Rules.

AI Summary

Cenvat Credit and Depreciation Allowed on Capital Goods: Rule 6(4) of Cenvat Credit Rules 2004 Confirmed A forum participant inquired about the applicability of Cenvat credit and depreciation on capital goods purchased for 1000 plus 15 excise duty. The question was whether Cenvat credit can be claimed on the excise duty portion while depreciation is claimed on the base amount of 1000. Respondents confirmed that this is permissible under both Income Tax and Cenvat Credit Rules, specifically referencing sub-rule 4 of Rule 6 of the Cenvat Credit Rules, 2004. The inquirer was also advised to consult relevant notifications, circulars, or case laws for further clarification.