Cenvat credit utility

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Ravi Nallipogu (Querist)
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05 October 2014 service provider maintain books Partly separate accounts (direct credit)and partly proportionate basis(rule 6(3)
whether cenvat credit between inter changeable

CA Parul Saxena

CA Parul Saxena (Expert)
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06 October 2014 please elaborate your query

Ravi Nallipogu

Ravi Nallipogu (Querist)
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06 October 2014 Dear Mr. Saxena,

Please clarify
As per provisions of service tax laws.
Partly separate accoutns and partly propotinate basis
a)Whether partly separate accounts and partly propotionate basis permissible in case of input service i.e take entire cenvat credit where direct relation is available and take cenvat credit propotinate basis in other cases
b) Issue debatable and litigation prone but experts view should be permissible on the basis of costing principle in absence of any specific prohibition in rules

In this scenario in separate account in relation we are getting always carry forward where as in proportionate always payable.
It can be interchangeable

CA Nilesh P. Kanodia

CA Nilesh P. Kanodia (Expert)
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07 October 2014 Dear Mr. Ravi,

As you stated above that firm is one where you are maintaining INPUT Services CENVAT credit register under two method:
1) Where whole service tax is allowed
2) Where partly is allowed

Ans.
If firm is one with single ST Registration Number there is no issue of interchangeability you can do so.

If there are two firms then your have to follow Cenvat credit Distribution rules i.e. on the basis of turnover of last year as per circular No 178/4/2014 ST dated 11th July, 2014.

Ravi Nallipogu

Ravi Nallipogu (Querist)
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07 October 2014 Dear Mr.Nilesh,
Thanks for your valuable reply.

In continuation to your reply , we have single ST Registration no and following partly separate and partly proportionate rule 6(3)
Direct cenvat always C/F
Proportionate always payable
Kindly suggest interchangability

Ravi Nallipogu

Ravi Nallipogu (Querist)
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15 October 2014 Dear Mr.Nilesh,

Please let me clarify

whether we need file half yearly return of st-3 (direct credit) and st-3A(rule 6)

Kindly confirm at earliest .

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