Cenvat credit and Depreciation on Capital Goods

[Pradeep Kaushik]

Respected Sirs,

we make import of capital goods( Machinery) for our manufecturing unit. Can we take the payment of CVD, additional duty as cenvat credit.

Is there any relation between Cenvat credit and Depreciation on the capital Goods. Because after a certain period the value of Capital goods will be written off due to regular depreciation charged. So according to Depreciation we have to reverse the credit of Cenvat. Please clarify.

 

AI Summary

Cenvat credit on imported capital goods duties allowed but must be reduced to the extent depreciation is claimed.
Cenvat credit is available on duties and cesses on imported capital goods, including countervailing duty, cess on CVD, SHE cess on CVD and additional customs duty, though specific components may be available to differing extents; however, credit for capital goods must be disallowed to the extent the value of those goods represents duty claimed as depreciation under the Income-tax law, creating a required reversal to align Cenvat credit with depreciation claims.