Rule 6, Cenvat Credit Rules

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CA. ROHIT GUPTA

Service

133 Points Joined November 2009

I have one query. I was going through Cenvat Credit Rules, 2004 post budget 2011..

Rule 6(2) allow us to Maintain separate inventory and accounts of receipt and use of inputs and input services used for exempted goods/exempted output services .

This rule is silent on common services used for proving both taxable as well as exempted output services.

Here if we are having services that is used commonly for providing both the taxable as well as exempted output services, can we take credit of ST paid on such services if we are following option under Rule 6(2)?

(Rule 6(3)(i) / (ii) / (iii) options are available only if we are not following Rule 6(2).

I don't think we can follow both Rule 6(2) as well as Rule 6(3)(ii) at the same time. We can follow only one option at a time.)

Please advice.

Also, Rule 6(5) has been deleted. How can we claim credit on such input services now?

Looking forward for reply.

Replies (5)

P.Bashista

Advocate

367 Points Joined July 2009

If you are providing services both taxable and exempted then either you maintain a seperate inventory (as per Rule 6(2)} or pay 5% duty on the exempted services (as per Rule 6(3)} and take credit on the input of both the services.

makarand

26 Points Joined January 2009

makarand

26 Points Joined January 2009

M/s.A company sells excisable goods to M/s. B - a "SEZ" company. M/s. B is requesting for exemption from payment of Excise duty and VAT.

Kindly advise a) which specific form/ document , if any, M/s.A has to collect from M/s.B in order to grant exemption from Excise Duty and VAT.

b) OR M/s. A collect ED & VAT from M/s. B. and let M/s B claim refund from the concerned authorities. ??

c) If exemption is granted to M/s B, and subsequently the excise authorities decline the exemption, M/s. A can collect ED with penalty from M/s. B, under any specific Rule.

Ajay Raghatate

Sr Executive (Excise & Accounts)

736 Points Joined February 2009

Rule 6 Cenvat Credit Rules 2001 effective from 01/04/2011

(iii) the amount attributable to input services used in or in relation to manufacture of exempted goods “and their clearance up to the place of removal” or provision of exempted services (provisional) = (E/F) multiplied by G, where E denotes total value of exempted services provided plus the total value of exempted goods manufactured and removed during the preceding financial year, F denotes total value of taxable and exempted services provided, and total value of dutiable and exempted goods manufactured and removed, during the preceding financial year, and G denotes total CENVAT credit taken on input services during the month;

1. Is this rule applicable for Excise Registered depot ?, from this depot issue excise Invoices.

Our company is mfg unit, and doing trading activity from a Excise registered depot, Company import some raw materials and consumed in plant as well as sale to other parties & high seas basis. in that case What amount of Input service tax credit eligible to apportion mean only which service tax credit which is commonly used for trading activity and for mfg unit. or all service tax credit. plz clarify.

thanks

U S Sharma

glidor@gmail.com

21068 Points Joined January 2010

dealer registration holders are not eligible for input credit of excise or service tax, the input credit facility is available to only exisable goods manufacturer/ taxable service provider.