How to avail cenvat credit?

Please refer Rule 6 (2) and Rule 6 (3) of the Cenvat Credit Rules, 2004 for maintenance of records in case of provision of taxable as well as exempted service.

A service provider availing CENVAT credit in respect of any inputs or input services for use in taxable output service as well as exempted service has the following four options

1. Maintain separate inventory and accounts of receipts and use of inputs and input services used for exempted goods/exempted output service-Rule6(2) of Cenvat Credit Rules, 2004;

2. Pay an amount equal to five per cent. of value of the exempted goods and exempted services-Rule6(3)(i)  of Cenvat Credit Rules, 2004;

3. Pay an amount equal to proportionate Cenvat Credit attributable to exempted output services

4. Maintain separate accounts for inputs and pay ‘amount’ as determined under Rule 6(3A) in respect of input services- Rule 6(3)(iii)of Cenvat Credit Rules, 2004