Cenvat Credit

[murali krishna]

Sir, My question is on Imported Capital Gooods Special Additional duty 4%, how much credit is eligible 50 percent or 100 percent ?

[Snehal Kulkarni]

You can avail the 100% Cenvat Credit against the SAD since it is duty on duty. 50% Credit is restrictred in case of CVD only.

[Vivek Dalmia]

2nd proviso to Sub-Rule 2(a) of Rule 4 of Cenvat Credit Rules, 2004 provides that the Cenvat Credit of the additional duty leviable under sub-section 5 of Section 3 of the Customs Tariff Act, in respect of capital goods shall be allowed immediately on receipt of the capital goods in factory of a manufacturer.

As SAD is levied under Sub-section 5 of Section 3 of the Customs Tariff Act, 100% of CENVAT Credit thereon is admissible at the time of receipt of the capital goods in the factory of the manufacturer.

Regards - T.R. Krishnamoorthy

AI Summary

Cenvat credit on special additional duty fully admissible for imported capital goods, allowed on receipt of the goods.
100% Cenvat credit is admissible on Special Additional Duty paid on imported capital goods; the 50% restriction for countervailing duty does not apply. As SAD is levied under sub section 5 of Section 3 of the Customs Tariff Act, the proviso to Sub Rule 2(a) of Rule 4 of the Cenvat Credit Rules, 2004 permits immediate credit of the additional duty on receipt of the capital goods in the manufacturer's factory.