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

100% Cenvat Credit Available for 4% SAD on Imported Capital Goods Under Section 3(5) of Customs Tariff Act A query was raised regarding the eligibility of Cenvat Credit on the Special Additional Duty (SAD) of 4% for imported capital goods, questioning whether 50% or 100% credit is permissible. Two responses clarified that 100% Cenvat Credit is available for SAD as it is duty on duty. The replies referenced the Cenvat Credit Rules, 2004, explaining that the credit for additional duty under Section 3(5) of the Customs Tariff Act is fully admissible upon receipt of the capital goods in the manufacturer's factory.