Import capital purchase

Question

Hi  all,
In capital goods procurement cutom duty load ed  on asset.
Also  domestic  purchase CVD,ECESS,ADDITIONAL DUTY Loaded  on inventory.Client want duty  not  loaded  o n inventory.
Pl send me possible  way .it's very urgent.This happen in p  r o  d  u   ct  i o n.
Regards,
Vivek

Answer 1

Dear Vivek,
How to avail CENVAT / Capital Goods Credit
The Cenvat scheme is a system whereby a manufacturer can avail of credit of the duties paid by a manufacturer of his raw materials, inputs, parts and components or his capital goods to pay his own Central Excise Duty.
This is intended to ensure that no manufacturer is forced to pay duty on the duty portion of his product. Briefly, in order to avail the CENVAT credit, the goods manufactured or produced have to pay duty. All inputs if used in the manufacture of the final product are eligible for Cenvat {except high-speed diesel oil and motor spirit (petrol)}.
All capital goods actually used in the manufacture of the final products are also eligible
All finished goods are eligible for the benefit of Cenvat except matches. However, availment of Cenvat on capital goods will be spread over two years, half in the first year.
A manufacturer availing cenvat on capital goods must not avail depreciation under the income tax act on the duty part of the cost of the capital goods.
There is no difference between capital goods and raw materials with respect to pricing procedure.
But when it comes to availing credit, Capital goods cenvat credit allowed 50% immediately and balance 50% after commining and installation of equipment or after 6 months or completion of fiscal year.
When cenvat credit for the capital goods are availed for the first 50%, the credit accounts are picked from GRPO transaction type and debit accounts from the CAPE. During Subsequent credit availment both credit and debit entries are picked from CAPE.
For Domestic proceurement of Capital Goods
<b>During GR</b>
          Material Stock      Dr.
          GR/IR clearing     Cr.
<b>During Excise Invoice Credit          </b>
          Cenvat Account     Dr.     (50%)
          Cenvat On-hold     Dr.     (50%)
          Cenvat Clearing     Cr.
<b>During Invoice Verification</b>          
                Cenvat Clearing     Dr.
          GR/IR Clearing     Dr.
          Vendor Payable     Cr
<b>Subsequent of Capital Goods</b>          
                Cenvat Account     Dr.     (50%)
          Cenvat On-hold     Cr.     (50%)
Hope this info will be useful.
Bye,
Muralidhara