CENVAT CREDIT ON CAPITAL GOODS -

[SANJEEV JADHAV]

Dear Sir,

We are manufacturer of Castings falling under chapter 73 of Central Excise Tariff Act 1985. Recently their is change in definition of Input. i.e. Input includes capital goods having value less than ₹ 10000/- Per Pc. Here wording is Per Piece. But some of capital goods we are getting on per Kgs. basis.

For example Refractory material falling under chapter 38160000 is getting to us on per Kg. basis. We have one purchase invoice, total Value of refractory material including Tax is ₹ 761940/- and total Kg. is 8000. Please confirm where we can take credit of Refractory material. I.e. In Input or Capital goods.

[KASTURI SETHI]

Dear Sh.Sanjeev Jadhav Ji,

In such a situation, better option is to take credit as Capital Goods. You will be in a comfort zone for all purposes i.e. accounting in books of accounts, audit purpose.

[Ganeshan Kalyani]

Sir, the amount is more than 10 thousand in your query. so it should be taken as capital goods. 50% of credit is eligible in the year of purchase and balance in next year i.e. on 01.04.2017 you can take the credit.

[KASTURI SETHI]

Sh.Sanjeev Jadhav Ji,

Rightly explained by Sh.Ganeshan Kalyani, Sir and hence agreed with his views along with further clarification.

[SANJEEV JADHAV]

Dear Sirs,

Thanks you for your suggestions.

AI Summary

Manufacturer Seeks Guidance on Classifying Refractory Material for CENVAT Credit; Advised as Capital Goods Under Chapter 73 A manufacturer of castings under chapter 73 of the Central Excise Tariff Act 1985 inquired about the classification of refractory material purchased on a per kilogram basis, with a total value exceeding 10,000, for CENVAT credit purposes. The query was whether to classify it as input or capital goods. Respondents advised treating it as capital goods, allowing for 50% credit in the purchase year and the remaining credit in the following year. The discussion concluded with the inquirer expressing gratitude for the guidance provided.