excise duty on nonvaluated item

[Former Member]

Hi,

when asset is sold out how the excise duty will calcuated for non valuated items on that asset...

[Former Member]

Hi

For sales of capital goods there is a special procedure for excise duties.

As per the notification number 39/2007 released by central government of India has amended rule 3 sub-rule 5 of cenvat credit rules 2004 as follows;

"provided also that if the capital goods, on which CENVAT 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% for each quarter of a year or part thereof from the date of taking the cenvat credit.

We can have a setoff of 2.5% per quarter on the excise duty paid .

on the remaining value we have to calculalte the excise duty at the time of sales.

Check this SAP NOTE 1223889 Reduction of capital goods duty payable on CG sales - J1IIN

regards

Prashanth