Excisable Machinery (Capital Goods) give as rental base

[Nitin Patel]

dear expert

We have purchase excisable machinery in may 2012 we have use this machine three year , now we thinking this give as rental base , we have taken credit of capital goods , so now we give this machinery as rental base question is we have required to reverce capital goods credit or not ,

AI Summary

Reversal of CENVAT credit required when capital goods are rented, with proportionate adjustment after prescribed depreciation.
When capital goods on which CENVAT credit was availed are put on rent, the supplier must charge service tax or VAT on rental receipts as per the agreement and reverse CENVAT credit proportionately by applying the prescribed quarterly depreciation adjustment from the date of purchase; the reversal and any duty/payment liability are computed on the depreciated value at the applicable rate.