WHETHER EXCISE DUTY LEVIABLE ON USED CAPITAL GOODS

[pankaj mudgal]

DEAR SIR,

                     Plz tell me about whether excise duty is levied on sale of used capital goods if these are not sold as waste & scrap.

[Snehal Kulkarni]

 

Yes, obviously.

Please read the rule 3(5) of Cenvat Credit Rules 2004. If you have availed the Cenvat Credit and removing the CG as such, then

 

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Provided also that if the capital goods, on which CENVAT Credit has been taken, are removed after being used, the manufacturer or provider of output service shall pay an amount equal to the CENVAT Credit taken on the said capital goods reduced by 2.5 per cent for each quarter of a year or part thereof from the date of taking the Cenvat Credit;”.

 

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[Santosh Kumar]

When inputs or capital goods, on which CENVAT credit has been taken, are removed as such from the factory, or premises of the provider of output service, the manufacturer of the final products or provider of output service, shall pay an amount equal to the credit availed..........

[Santosh Kumar]

sir,

you have to pay an amount equal to Cenvat credit taken on the caital goods, redued by 2.5% fir each quarter of a year or part thereof from the date f taking cenvat credit.

[Natraj DMurthy]

Dear sir,

We need to clear some excisable capital goods and the dept., indicates that excise duty should be remitted @ the current rate ie. 12.36% on the deprecited value of the asset.

The usual practice is to depreciate the asset @ 13.91% (WDV as per Co's act) and depreciate the Excise/Customs duty taken in 2 instalments of 50% each @ 2.5% for each completed quarter.

 

Pls advise.

Raj

[r.rajkumar kumar]

If you availed input credit  while purchse of the capital goods. when you are selling the same

10% p.a reduce  and pay the balance cenvat to government while selling the capital goods. tks

AI Summary

Cenvat credit adjustment required on sale of used capital goods, payable reduced over time from credit date. Where CENVAT credit has been availed on capital goods, removal or sale of those goods after use requires payment equal to the CENVAT credit taken on the goods, reduced by a fixed percentage for each quarter or part thereof from the date of taking the credit. Administrative practice may alternatively involve assessing excise on a depreciated asset value, but the statutory reversal mechanism applies when input credit was claimed.