CENVAT Credit on Computers and Air Conditioners

[PANKAJ GROVER]

Dear All

Whether Service Provider can claim CENVAT of Excise Duty paid on Computer, Air Conditioner installed in the building of service provider, if yes then either capital goods or input?

Please reply

Regards

RAPG & Co.

 

[ROHAN THAKKAR]

Dear Sir,

It will be treated as input. 

 

Regards,

Rohan Thakkar

[SNEHAL SHAH]

Sir,

Please refer the definition of Capital goods as per section 2 (a) of CCR, 2004 as under:

 

      (a)  “capital goods” means:—

             (A)  the following goods, namely:—

                       (i)  all goods falling under Chapter 82, Chapter 84, Chapter 85, Chapter 90,  ¹ [heading 6805, grinding wheels and the like, and parts thereof falling under heading 6804] of the First Schedule to the Excise Tariff Act;

                      (ii)  pollution control equipment;

                     (iii)  components, spares and accessories of the goods specified at (i) and (ii);

                     (iv)  moulds and dies, jigs and fixtures;

                      (v)  refractories and refractory materials;

                     (vi)  tubes and pipes and fittings thereof; and

                    (vii)  storage tank,

                    used—

                      (1)  in the factory of the manufacturer of the final products, but does not include any equipment or appliance used in an office; or

                      (2)  for providing output service,

 

From the definition it’s quite clear that capital goods have to be used for providing output service whether directly or indirectly. When the capital goods are not at all used for providing output service then how can we use the credit of the same?

Hope You are clear .

Regards,

SACHIN SHAH

 

[DEV KUMAR KOTHARI]

Whether Service Provider can claim CENVAT of Excise Duty paid on Computer, Air Conditioner installed in the building of service provider, if yes then either capital goods or input?

 

Computer and  Air Conditioners are capital assets if they are used as such for renderign taxable services, then apparently CENVAT credit will be based on capital goods for renderign taxable services  basis and not as input  for renderign services.

Please always give clear facts and applicable law for better discussion.  

AI Summary

CENVAT credit on computers and air conditioners treated as capital goods when used to provide taxable services.
Whether excise duty paid on computers and air conditioners qualifies for CENVAT credit depends on classification as capital goods or inputs: under the CENVAT Credit Rules, 2004, items constitute capital goods only when used for providing output service (directly or indirectly), and equipment used in an office is excluded; entitlement to credit therefore depends on factual use in rendering taxable services.