TRANSFER OF CAPITAL GOODS FROM ONE STATE TO ANOTHER

[Asked by Guest]

Dear Members,

we want to transfer the capital goods (situated at Tamilnadu_ Registered under Excise ) to another site (A.P) , what are the legal procedures & compliance to be followed in order to make transfer smoothly.

Is it required to Register the Premises (A.P) ?

Why we want to make transfer is because of Project is over at Tamilnadu, so if we holding the Machinery there we are going to bear fixed costs. now the site (A.P) is not registered under Excise . is there any alternatives available for us to make transfer of Capital goods to A.P ??

Kindly assist me.

AI Summary

Cenvat credit reversal on transfer of capital goods requires payment based on depreciated credit or duty on transaction value.
Transfer of capital goods removed after use triggers CENVAT credit reversal under Sub Rule (5A) of Rule 3, Cenvat Credit Rules, 2004: the transferor must pay the credit taken reduced by prescribed quarterly depreciation rates, with a proviso that if this computed amount is less than duty on transaction value the duty on transaction value becomes the payable amount. The rule applies to removals after use including lease or transfer to another unit; if goods are removed "as such" full reversal is required. Non registration of the receiving unit makes excise duty a cost and transfer of right to use may attract State VAT.