Cenvat rule 6 (3)

Common service credit however, there are judgments which says total credit should be considered.

Upto 31 March 2016

On perusal of Rule 6(3A) of CCR it appears that the credit has to be reversed on total CENVAT credit availed. Further, the same view was upheld by Hon'ble Tribunal in the case of Thyssenkrupp Industries (I) Pvt Ltd vs Commissioner of Central Excise, Pune, 2014 (10)TMI 476.

However, in my opinion, the intention of the law would not be to reverse credit of input services used specifically against the provision of taxable output services as the same would be unjust to the assessee. Hence, a view may be taken that the credit has to be reversed on common services only but this view may be litigative. (This view is widely followed accross industries)

1 April 2016 onwards

CCR has been amended to take care of this situation. Reversal has to be made in  respect of common services only.