CREDIT OF SAD IN RG 23 A PART - II C

[SHARMA NARAYAN]

Dear All

we received the material in varioys ch heading that is not capitalitem but we are capitalise the said material because of highvalue there is basic duty and SAD on invoice how can i take cenvat credit i am doing as per below detail

sir i am taking 50 % of basic Duty in current year and rest 50 % next year and Sad i am taking 100 % credit in current year is thic correct or not pls reply

[Ganeshan Kalyani]

Happy New Year 2017.

Primarily you need to check whethe items has been capitalized with taxes or not. If yes then there is no question for Cenvat credit. Thanks .

[SHARMA NARAYAN]

excise duty not capitalise

[MUKUND THAKKAR]

sir i am taking 50 % of basic Duty.

if you have received imported material than you can availed 50% of CVD amount + 100% of SAD amount.

if you have received capital goods Indigenously , In case Basic duty 50% and goods procuring from 1st or 2nd stage dealer and passing SAD. in case you can also Eligible to take 100% credit.

[SHARMA NARAYAN]

thanks to all of you sir

[Ganeshan Kalyani]

I agree with the views of Sri Mukund Ji's view.

[KASTURI SETHI]

Sh.Ganeshan Kalyani Ji,

Sh.Mukund Thakkar, an expert seldom appears but when he appears take it for granted that his answer to query is correct. 99.99 % he is correct.

[YAGAY and SUN]

According to Vikram Cement judgment, the definition of Capital Goods is very Stringent. If goods do not fall in this definition as amended from time to time then just capitalizing the same for accounting purpose would not do anything good. In the above query it is mentioned that goods procured by Mr. Narayan Sharma are not capital goods but they are capitalizing the same due to having high value.

In our view this will backfire in near future. Experts views are welcomed.

AI Summary

Cenvat credit eligibility for SAD: accounting capitalization alone does not establish capital goods status; statutory definition governs.
Eligibility to claim Cenvat Credit depends on the statutory classification of goods rather than accounting capitalization; goods not meeting the definition of Capital Goods cannot be converted into capital goods for credit simply by capitalising them. For imported and indigenously procured items the treatment of duty components differs and claiming credit based solely on accounting practice may invite future denial.