can any one provide illus on rule 6(amended)...(cenvat credit )... its in new bangar... i cant buy it.... so if any one can provide any link or scanned copy ... pls i need it..its imp 4 up coming xam pllss plsss do help
can any one provide illus on rule 6(amended)...(cenvat credit )... its in new bangar... i cant buy it.... so if any one can provide any link or scanned copy ... pls i need it..its imp 4 up coming xam pllss plsss do help
praveen
(Chartered Accountant)
(6971 Points)
Replied 18 October 2011
Some Issues on Rule 6 of CENVAT Credit Rules 2004
The most happening topic under the whole of CENVAT credit rules, 2004 is Rule 6. This topic since its introduction has not been asked in the exams [CA Final [existing]].
Keeping this in view some issues are discussed in this article, which have been collected from different sources so as to help students of May 2010.
RULE 6 of CENVAT Credit Rules, 2004
Options available
|
Maintain Separate Accounts |
Not Maintain Separate Accounts [amount to reverse/paid] |
||
|
For receipt, consumption & inventory of input of input services for use in dutiable goods or taxable services |
Quantity of input or input services for use in exempted goods or services |
Sub-OPTION – I Manufacturer – 5% of value of Ex goods Service provider – 6% of value of Ex services |
Sub-OPTION- II [As discussed below] |
Amount to be reversed or paid in case of OPTION – II
[FIRST STEP] - Provisionally every month pay/reverse the aggregate of following
|
For inputs used in Mfg. of Exempted GOODS |
For inputs used in provision of Exempted SERVICES |
For input services used in mfg of Ex GOODS / Ex SERVICES |
|
|
[Y] |
|
|
|
|
Where, [during preceding FY] |
Where, [during concerned month] |
||
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A = Value of Ex Goods Mfg & Cleared |
X = CENVAT credit on Inputs |
||
|
B = Value of Dutiable Goods Mfg & cleared |
Y = CENVAT credit attributable to Ex Goods |
||
|
C = Value of Ex Services provided |
Z = CENVAT credit on Input Services |
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D = Value of Taxable Services provided |
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[SECOND STEP] – Computation of annual amount payable/ reversible under OPTION –II
Follow the same procedure as stated in FIRST STEP with the following changes,
*Reference to “during preceding FY “
*Reference to “during Concerned month”
* replace with “during the financial year”
Some important points relevant for Rule 6(3)/3(A) relating to option of not maintaining separate accounts:
1. Even if accounts are not maintained, credit on inputs or input services which are used exclusively for manufacture of exempted goods or provision of exempt services shall not be allowed.
2. Option under rule 6 once exercised, it shall be applicable to all goods/services for that financial year and to all business activities undertaken by him.
3. Exempt services include non taxable services but does not include services which are exported without payment of service tax.
4. Value shall be computed as per Sec 4/4A, as applicable, of central excise act/ rules and as per sec 67 of Finance act.
5. The value of exempted service is the gross amount charged for providing exempted service without abatement.
Clarification on computation of provisional/actual amounts under Rule 6(3)/(3A)
CENVAT credit taken on inputs/input services during the month/financial year shall not include the following
a. Duty paid on inputs or service tax paid on input services which are used exclusively for manufacture of exempted goods or provision of exempted services and
b. The credit attributable to services mentioned in Rule 6(5)
Credit on Capital Goods [Rule 6(4)]
Credit on capital goods used exclusively for manufacture of exempted goods/provision of exempted services shall not be allowed.
Thus, credit can be availed if such capital goods are used for manufacture of dutiable and exempted goods or provision of exempted and taxable services.
Important Circulars
1. Circular No 904/24/09-CX dated 28-10-2009
After amendment of sec 2(d), the bagasse, aluminum/ zinc dross which are termed as waste are chargeable to duty. In case such products are chargeable to “nil” rate or exempt, then, Rule 6 shall be applicable.
2. Circular No 1/2009 dated 5-5-2009
Input services which are used in relation to capital goods, which re in turn used exclusively for manufacture of exempted goods or provision of exempted services, then Rule 6 shall be applicable and consequently no credit shall be allowed on such input services.
3. Circular No 868/6/2008-CX dated 9-5-2008
Rule 6 shall not apply to Input Service Distributor, as he does not provide any service.
Some Important judgments
1. CCEx v. Gujarat Narmada Fertilizers Co. ltd [2009]
CENVAT credit cannot be allowed in respect of goods used in generation of electricity which in turn is used for manufacture of exempt goods [here fertilizers] and dutiable goods, to the extent the goods used in generation of electricity used in production of fertilizers.
There was a contrary view in CCEx. V. Gujarat State Fertilizers & Chemicals Ltd [2008], which said, such credit is allowable as inputs used for generation of electricity used ‘for any other purpose’ are also ‘inputs’ [as per definition of inputs].
As the judgment in Gujarat Narnada’s case was rendered later in time, it shall prevail.
CA Rachit Gupta
(Chartered Accountant)
(1315 Points)
Replied 18 October 2011
Hi Vikas...U may check the attached file..
CA Rachit Gupta
(Chartered Accountant)
(1315 Points)
Replied 18 October 2011
Sory attach karna hi bhul gya tha..Now you can check.
CA Rachit Gupta
(Chartered Accountant)
(1315 Points)
Replied 18 October 2011
Your Welcome Vikas....Everybody is here to help someone....Thanks to CCI...
Sohail Shk
(artcle)
(39 Points)
Replied 18 October 2011
Hey rachit ...Ur Contributions are Damn Good and really really helpful...
I wanted to know if you have something for Sox in audit & standard costing
CA Rachit Gupta
(Chartered Accountant)
(1315 Points)
Replied 18 October 2011
Hi Vikas....sory yar...SOX k liye to kuch nai hai...lekin standard costing k summary attached hai...
CA Rachit Gupta
(Chartered Accountant)
(1315 Points)
Replied 19 October 2011
Your welcome Dheeraj..:)
CA NEESHU CHADHA
(CHARTERED ACCOUNTANT)
(59 Points)
Replied 19 October 2011
thanks rachit good contribution ....
CA Rachit Gupta
(Chartered Accountant)
(1315 Points)
Replied 19 October 2011
Your Welcome Tanishka..:)
asif
(student)
(26 Points)
Replied 25 October 2011
DEAR MEMBERS I HAVE CLEARED MY CPT IN 2009 AND GOT REGISTERD FOR IPCC BUT DUE TO SOME FAMILY AND FINANCIAL PROBLEMS I WAS NOT ABLE TO SIT IN THE EXAMS TILL DATE . I WANT TO KNOW THAT JUST FILLING UP EXAM FORM AND NOT GIVING IT WILL BE COUNTED AS AN ATTEMPT OR NOT. IAM PLANNING TO GIVE NOV 2012 ATTEMPT AFTER GRADUATION. PLEASE REPLY AS SOON AS POSSIBLE NEED URGENT HELP
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