cenvat credit

[SHARMA NARAYAN]

Dear all '

Pls suggest

can we take cenvat credit in capital item for ch heading 73-74

and electric cable Dg set

and HDPF pipe for inlet and out let water for boiler and industrial use

[Suryanarayana Sathineni]

Dear Friend,

Pl. refer the capital Goods definition in the Cenvat Credit Rules,2004. According to the said definition, certain goods falling under specific chapters like under chapters 82,84,85 and so on are qualified as Capital goods and followed by spares and accessories for the said goods also eligible for credit as capital goods.

You have to check whether the items stated in your query are falls under spares and accessories for the goods falling under chapters 82,84,85 and so on as stated in the definition or otherwise falling under any other category in the said definition under various clauses and proceed accordingly.

If the said items are not covered under any of the categories detailed above, then you may have to check whether they qualify as inputs and if so you may have to take credit under inputs category.

While doing so, you may also have to refer the recent amendment in the last Budget that even if an item is qualified as capital goods under the definition, if its value is upto ₹ 10,000/- per piece, then you can take credit of 100% as if they are inputs.

Trust this addresses your query

Best Regards

Suryanarayana

[SHARMA NARAYAN]

this is related to ch heading 84 - 85

and attached with the capital goods

AI Summary

Cenvat credit classification determines whether items qualify as capital goods or input credit; low-value items may be treated as inputs.
Cenvat credit eligibility turns on classification under the Cenvat Credit Rules, 2004: items falling within the definition of capital goods (notably goods under chapters such as 82, 84 and 85) and their spares/accessories qualify as capital goods credit; items not so covered must be assessed as inputs. A Budget amendment permits treating low-value capital goods as inputs for full credit. The enquirer should map each item to the relevant chapter/classification, determine capital good or input status, and then apply the low-value rule where applicable.