Cenvat credit on input used to manufacture capital goods

[Vikash Kumar]

Is Cenvat credit permissible on input used to manufacture capital goods ?

[Rajesh Nathoo]

Yes, provided the Capital Goods satisfy the definition of Capital Goods as defined under Cenvat Credit Rules.

[CMA VENKATESHAM MUTA]

I think 50% of the CENVAT will be utilised in the C.Y. and the remaining will b in next year.

[CMA VENKATESHAM MUTA]

Sorry, my reply was wrong

[PARTHASARATHY V]

When the machinery manufactured in a factory it will be qualified as Excisable goods and falling under specific tariff heading depending upon the name of the machine.

You can take Input credit for the machines used, but you have to give declaration under Notification 65/97 for the goods manufactured in in-house and used for manufacture of subsequent final product and also the machine manufactured having the exemption benefits as per the notification referred above.

It is better to give declaration / intimation under 67/97 you are proposed to mfg.enjoying the credit.

[PARTHASARATHY V]

Please read the Captive Consumption Notificaiton No.as 67/95 inadvertently typed as 67/97 sorry for the wrong citation.

AI Summary

Cenvat Credit Allowed on Inputs for Capital Goods if Definitions Met; 50% Usable in Current Year A discussion on a forum addressed whether Cenvat credit is permissible on inputs used to manufacture capital goods. One participant confirmed that credit is allowed if the capital goods meet the definition under Cenvat Credit Rules. Another suggested that 50% of the credit could be utilized in the current year, with the remainder in the next. Additional input highlighted the need for declarations under specific notifications for machinery manufactured in-house. A correction was made regarding the correct notification number for captive consumption. The discussion involved five replies, focusing on compliance with relevant rules and notifications.