Clarification of credit on capital goods

[Asked by Guest]

As per Rules CENVAT credit Cenvat Credit on Capital Goods can claim 50% in current year and next 50% in next year, Now Suppose i have received a bill on 30th March 07, can i claim balance 50% on next month (i.e 1st April 07) or the balance will be available on next year 30th March 08.(i.e exactly after 1 year of Bills Received)

[Madhukar N Hiregange]

The law allows that you can take 50% in March and the balance 50% in April. In april the same should be in possession tah is all.

In the instant case, you can avail 50% as on 30th March and balance as on 1st April 2007. Before taking credit, make sure that you have received the capital goods in the premises for use in the manufacturing activity of finished goods liable to excise duty.

The provision of bifurcating the amount of claim is only with regard to financial year. So you can take 50% of the cenvat credit on 31st march and balance 50% on ist April.

AI Summary

Cenvat credit on capital goods may be split across financial years, with remaining credit claimable after year-end upon receipt.
Cenvat credit on capital goods may be split across financial years, allowing a portion of credit to be taken in the year when the invoice is received and the balance in the next financial year. This split is permitted where an invoice falls at year-end; the assessee may claim part immediately and the remainder after year-end, provided the capital goods are received at the assessee's premises for use in manufacturing excisable goods and the physical receipt requirement is met prior to availing the credit.