Cenvat on Capital Gooods

[Ramesh Patel]

We are regestered in Excise on 04/04/07. We purchase capital goods and avail 50% cenvat in 07-08. But due to clearence bolow Rs. 150.00 Lacs we could not utilised it in 07-08. In 08-09 we cross the clearence limit and utilised it. Weather we are eligible to claim cenvat on capital goods purchased in 07-08 even though we haven't cross clearence limit.

[Rama Krishana]

Provisions of Rule 11 of the Cenvat Credit Rules, 2004 read with SSI exemption notification no. 8/2003 CE dated 1.3.2003, you can avail the credit on capital goods but you can utilise the same untill the limit of Rs. 1.5 crores is reached.

AI Summary

Cenvat credit on capital goods: available when acquired under SSI exemption but utilisable only after turnover threshold is crossed. Purchase of capital goods may generate Cenvat credit when acquired, but utilisation of that credit is subject to the SSI exemption and the Cenvat Credit Rules; the credit can be availed/booked earlier yet only utilised after the taxpayer crosses the prescribed turnover threshold that removes the exemption.