TMI Blogcenvat credit reversal on capital goods-regX X X X Extracts X X X X X X X X Extracts X X X X ..... Dear Sir, We are having one imported machine imported during 2011. We have taken cvd and sad. Now we want to sell the machine. What is the procedure. whether the sad amount also has to be reversed or only cvd has to be reversed. how to go about it. Kindly experts please clarify. Thanks Regards, S.Ramakrishnan - Reply By Praveen Maheshwari - The Reply = Dear Ramakrishan Ji, You can remov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e capital goods under a cover of Central Excise Invoice by reversing proportionate Cenvat Credit of CVD and SAD both as per Rule 3(5A)(a) of Cenvat Credit Rules 2004. But if you are removing those capital goods as waste and scrap then you will be required to pay Central Excise Duty on transaction value as per Rule 3(5A)(b). - Reply By Rajagopalan Ranganathan - The Reply = Sir, Accor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding to rule 3 (5A) (a) of Cenvat Credit Rules, 2004, if the capital goods, on which CENVAT credit has been taken, are removed after being used, the manufacturer or provider of output services shall pay an amount equal to the CENVAT Credit taken on the said capital goods reduced by the percentage points calculated by straight line method as specified below for each quarter of a year or part th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ereof from the date of taking the CENVAT Credit, namely:- (i) for computers and computer peripherals: for each quarter in the first year @ 10% for each quarter in the second year @ 8% for each quarter in the third year @ 5% for each quarter in the fourth and fifth year @ 1% (ii) for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... capital goods, other than computers and computer peripherals @ 2.5% for each quarter : Provided that if the amount so calculated is less than the amount equal to the duty leviable on transaction value, the amount to be paid shall be equal to the duty leviable on transaction value. (b) If the capital goods are cleared as waste and scrap, the manufacturer shall pay an amount equal to the duty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... leviable on transaction value. You have to comply with the above provisions when you dispose of either locally procurred capital goods or imported one. - Reply By Ganeshan Kalyani - The Reply = Sir, in nutshell Cenvat credit covers CVD and SAD as well and therefore when the capital goods is removed on which credit was taken in past, needs to be reversed in the manner elaborate by Sri Rangana ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... than Sir. Thanks. - Reply By KASTURI SETHI - The Reply = I agree with all the experts. Views expressed by the experts are crystal clear. - Reply By Ramakrishnan Seshadri - The Reply = Dear Sirs, I agree with the experts. whether i have to reverse the sad amount also Thanks Regards, S.Ramakrishnan - Reply By KASTURI SETHI - The Reply = Sh.S.Ramakrishnan Ji, Yes. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... If you do not opt for payment of duty on transaction value for removal of such capital goods after period of 11-12 years, you will have to reverse credit of SAD also. - cenvat credit reversal on capital goods-reg - Query Started By: - Ramakrishnan Seshadri Dated:- 11-5-2016 Central Excise - Got 6 Replies - Central Excise - Discussion Forum - Knowledge Sharing, reply post by an expert, perso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal opinion Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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