VESSSELS TANK

[SHARMA NARAYAN]

Dear sir,

we received vessel tank under ch heading 73090040

can we take credit under Part-II C

[Rajagopalan Ranganathan]

Sir,

According to Rule 2 (a) (A) (vii) of Cenvat Credit Rules, 2004, 'storage tank' is a capital goods and you can avail the credit of duty paid on such tanks at the rate of 50% in the first year of procurement and the remaining 50% can be taken during any of remaining years.

[YAGAY and SUN]

If you have just received it but not purchased it then Service Tax would be chargeable. It is settled legal position.

AI Summary

Cenvat Credit on storage tanks: treated as capital goods with phased credit; alternatively service tax may apply if not purchased.
Under the Cenvat Credit Rules a storage tank is classed as a capital good; duty paid on such tanks may be claimed in a phased manner, with half the credit available in the initial year and the remainder in subsequent years. If the tank is received but not purchased, service tax may be chargeable, a position treated as settled.