Below 10000 of Capital Goods treated as input

[Asked by Guest]

Dear Sir,

According to 2016-budget cenvat credit Rule-2004 has been amended and according to that below amount of 10000 value of capital Goods we can take credit of 100% i.e as a input.

My query is below 10000 value capital Goods Cenvat Credit we can take credit in our RG-23-A that is input credit Register ot RG-23-C that is Capital Goods Credit Register ?

Regards

Swapneswar Muduli

[KASTURI SETHI]

You may take credit in RG 23 C. Definition of capital goods has not been changed. The benefit is that you have not to take credit in piece meal. You r not to wait for another year for taking whole credit

[Rajagopalan Ranganathan]

Sir,

There no statutory records like R.G.23 A or R.G. 23 C. Your own private accounts will be accepted by the Department. You can take the credit in the same account but at different folio.

[KASTURI SETHI]

It is a matter of common knowledge that RG 23 C & A are not statutory records but the assesses are maintaining the same for their convenience. Otherwise the essence of both replies is the same.

[Ganeshan Kalyani]

Sir, though the maintenance of RG-23 A & C is dispensed with, many Company is still maintaining the records in their accounting systems like SAP, QAD application etc. This gives them a lot of advantages during Excise Audit. Thanks.

[KASTURI SETHI]

Sh.Ganeshan Kalyani Ji,

Yes, Sir. In Chandigarh Zone, 90% manufacturers are maintaining these records with these columns either on computers or manually. These registers are still being sold as there is demand. Most of the assessees maintain Form-IV register which earlier prescribed for raw material. If any person maintains R.G.23 A Part.I, there is no need to maintain Form-IV. But Form-IV is being maintained. Assessees like the columns of these registers very much for proper accountal.

[Suryanarayana Sathineni]

Dear Swapneswar,

As already stated there is no such mandatory requirement to maintain RG23-A and C seperately except to maintain a consolidated Cenvat Credit Account which is also not a statutory one. According to me majority of the assessees are only maintaining a consolidated Cenvat Account except, few assessees who are still following the old procedure in some places.

I suggest, in your case if, you are still following the old practice of maintaining RG 23-A and C, you can continue the same and there is no issue .

As far as taking credit is concerned, I suggest you to take the same in RG23-A since, the Rule itself is clear that credit on capital goods upto the Value of ₹ 10000/- per pice, credit can be taken considering that they are inputs. However, if , you have any concern , you may also take in RG23C.

Best Regards

Surya

[CSSANJAY MALHOTRA]

Dear Mr. Swapneshwar,

Can you please revisit your Query ......... You have mentioned "below ₹ 10,000/- value Capital Goods". Budget 2016-17 mentions of ₹ 10,000/- per piece as value of capital goods (for Input Tax Credit Treatment).

Hope you would find difference in between two for sake of better clarity......

[KASTURI SETHI]

Sh. CS SANJAY MALHOTRA Ji,

Sir, This is not an isolated case.

[CSSANJAY MALHOTRA]

Respected Sh. Kasturi ji,

Agreed. But incorrect use of phrases would have adverse impact too. Mentioned below is random example, which all experts are aware of :

For e.g. Bearings purchased 2 Nos costing ₹ 9,000/- each in terms of total Capital Godos cost works out to ₹ 18,000/-. but it should not be taken by querist as though the value of capital goods has increased ₹ 10,000/-, hence CENVAT credit will not be eligible to 100%, which is not the case. Value of CG in terms of per pc has to be seen, which is ₹ 9000/- (less than ₹ 10,000/- per pc) hence CENVAT 100% is eligible.

My submission is that we should make querist also understand to read the law better before placing the query....

[Yatin Bhopi]

Dear all,

I want further clarifiction on value of capital goods per piece.

I have received one bill for pipes where unit of measherment is per Meter and rate is fixed as a per meter.

qty rate value

100 300/mtr 30000/-

in this case whether I avail 100% in input or 50% in capital goods?

Please let me know

[KASTURI SETHI]

50% of Capital goods.

AI Summary

Capital goods below the specified per piece threshold treated as inputs, permitting full cenvat credit; unit of measure controls eligibility.
Capital goods whose per-piece value falls below a specified threshold may be treated as inputs for Cenvat credit, permitting full credit immediately rather than by instalments; determination is on a per-unit or per-measurement basis. Maintenance of RG-23A and RG-23C is not mandatory-taxpayers can use consolidated Cenvat accounts or internal registers-so credit may be recorded in conventional RG-23 style registers or consolidated accounts provided the classification and quantum are clearly reflected.