Rule 6 of the cenvat rules, which provided for the procedures to be followed in case assessee is engaged in manufacturing taxable as well as exempt goods providing taxable as well as exempt services, has. Analysis of amendments in cenvat credit rules, 2004 the honble finance minister presented the union budget for 201516 on 28th february, 2015. March 1, 2015 9 provision of rule 12aaa of the cenvat credit rules, 2004. Natarajan, advocate, swamy associates the following sub rule 4 of rule 6 of cenvat credit rules, 2004 has been introduced with effect from 01. But unfortunately, the rule in its amended form is capable of fomenting more confusions than its erstwhile version. Provided that nothing contained in these rules relating to availment and utilization of credit of service tax shall apply to the state of jammu and kashmir. Application for refund of cenvat credit under rule 5 of the cenvat credit rules, 2004. Dear professional colleague, scope of exempted services for reversal of cenvat credit under rule 6 of the credit rules alarming bell the union budget 2016 has witnessed revamp changes in the cenvat credit rules, 2004 the credit rules amongst many other changes brought in the arena of indirect taxes. In the cenvat credit rules, 2004 hereinafter referred to as the said rules, in rule 2. Rule 92 cenvat credit will be allowed if relevant information are contained in documents no cenvat credit under subrule 1 shall be taken unless all the particulars as prescribed under the central excise rules, 2002 or the service tax rules, 1994, as the case may be, are contained in the said document. Changes in cenvat credit rules, 2004 and its impact.
Memorandum for provisional deposit under rule 6 of the service tax rules,1994 st4 form of appeal to the commissioner of central excise appeals. Cenvat credit rules, 2004 ccr 04 have been notified vide notification no. Credit under rule 56a of the erstwhile central excise rule 1944, which provided credit of duty paid on. Rule 9 of the cenvat credit rules, 2004, provides various provision for documents and accounts for the purpose of cenvat credit.
An assessee who is a manufacturer of dutiable goods or provider of output services or both invariably receives services on which he pays service tax and is eligible to take credit in terms of rule 31 of the cenvat credit rules, 2004. Sub rule 2 of rule 9 provides that, no cenvat credit under subrule1 shall be taken unless all the particulars as prescribed under the central excise rules, 2002 or the service tax rules, 1994, as the case may be. Amendment in rule 47 cenvat credit in respect of input. In the said rules, in rule 9, in subrule 4, the following proviso shall be inserted at the end, namely. Credit lying unutilised in his accounts to such transferred, sold, merged. Summary of service tax rule with charts ca club of india. Radha arun, consultant to udyog software india ltd. As per rule 61 of cenvat credit rules, cenvat credit is not admissible on such quantity of input or input. Credit amount is equal to the amount of duty shown in duty paying documents of inputs c.
Reversal of cenvat credit rule 35bc indian tax updates. The cenvat credit rules, 2004 has always been an evolving. The relevant extract of rule 47 of cenvat credit rules, 2004 before amendment, reads as follows. The central government amends rule 3 of the cenvat credit. Rule 41 cenvat credit in respect of input to be claimed within six months from the duty paying document. Rule 9 2 cenvat credit will be allowed if relevant information are contained in documents no cenvat credit under sub rule 1 shall be taken unless all the particulars as prescribed under the central excise rules, 2002 or the service tax rules, 1994, as the case may be, are contained in the said document. Rule 41 cenvat credit in respect of input to be claimed within six months from the duty paying document with effect from 01. The salient features of this rule is explained below through faq. Rule 4 of the cenvat credit rules, 2004 is the main pillar of the set of rules. Particulars of invoices issued by first stagesecond stage dealer. This paper contains a brief on the changes made to the cenvat credit rules 2004 in budget 2016.
These changes have been made keeping in mind the omissions that were noticed in these rules throughout and the anomalies have been addressed now. Cenvat credit after six months of the date of issue of any of the documents specified in sub rule 1 of rule 9. In rule 10, in case of transfer of business, change in ownership on account of sale, merger, amalgamation, lease or transfer of the factory to a joint venture, there is a provision of transfer of cenvat credit remaining unutilized but the time limit of permission to be given by the department was not specified but by this notification. May 26, 2016 2 of 29 overview of rule 6 of cenvat credit rules, 2004 understanding rule 63 instances where rule 63 is applicable methodology to reverse common cenvat credit understanding rule 63i case studies for rule 63i understanding rule 63ii 63a case study for rule 63ii 63a old vs new rule 63 discussion items. Credit rules, 2002, except as respects things done or omitted to be done before such supersession, the central government hereby makes the following rules, namely. The same is in supersession of cenvat credit rules, 2002 ccr 02 and service tax credit rules, 2002 stcr. Many banks prefer this option as it is easy and leaves less scope for errors and interpretational issues. Input service credit on supplementary invoice sir, author has raised a very valid observation on the need to make suitable amendments to rule 4a of service tax rules and rule91b of ccr,2004 to enable the service receiver manufacturer take credit of tax paid due to change in rate of tax as contemplated under rule 41b1 of point of taxation rules 2011.
Input service credit on supplementary invoice sir, author has raised a very valid observation on the need to make suitable amendments to rule 4a of service tax rules and rule91b of ccr, 2004 to enable the service receiver manufacturer take credit of tax paid due to change in rate of tax as contemplated under rule 41b1 of point of taxation rules 2011. Tiol tax news, gst, income tax, service tax, customs. The cenvat credit rules, 2004 have been recently amended vide notification no. Eximkey india dgft, customs, excise, export import policy. Rule 3 or rule of the cenvat credit rules, 2004 has been taken in respect of inputs or capital goods. Jun, 2010 central excise job work rules, 2004 as per rule 4 5 a of the cenvat credit rules erstwhile rule 57 f 4 of the central excise rules, 1944 credit availed inputs can be removed, either as such or after being partially processed, to the premises of job workers for further processing, testing, repair, reconditioning or any other purpose.
As per sub rule 1 of rule 3, a manufacturer or an output service provider can take cenvat credit of i basic excise duty. May 26, 2016 the cenvat credit rules 2004 as amended by notification no. Mar, 2007 rule 9 of the cenvat credit rules, 2004, provides various provision for documents and accounts for the purpose of cenvat credit. The union government made changes to the old cenvat credit rules of 2002, putting in place new cenvat credit rules by exercising their powers under the central excise act of 1944. As per this rule credit may be utilized for payment of a any duty of excise on any final products or b an amount equal to cenvat credit taken on inputs if such inputs are removed as such or after being partially processed. The central government amends rule 3 of the cenvat credit rules, 2004 10 january 2014 background the sub rules 5, 5a, 5b and 5c of rule 3 of the cenvat credit rules, 2004 prescribes the provisions relating to treatment of cenvat credit availed, under the aforesaid circumstances. Analysis of amendments in cenvat credit rules, 2004. A total of 16 rules are mentioned under this provision, each one containing information relevant to a certain topic. See subrule 6 of rule 7 quarterly return under rule 7 of the cenvat credit rules, 2002 for the registered dealers return for the quarter ending 1. Rule 9 documents and accounts cenvat credit rules, 2004.
Return registered dealer quarterly return under rule 9 of the cenvat credit rules, 2004 for the registered dealers see subrule 8 of rule 9. Credit on inputs capital goods whether penalty under this rule of rs 2000 is the maximum penalty or minimum penalty. May 26, 2016 in exercise of the powers conferred by section 37 of the central excise act, 1944 1 of 1944 and section 94 of the finance act, 1994 32 of 1994 and in supersession of the cenvat credit rules, 2002 and the service tax credit rules, 2002, except. Credit rules, 2002, except as respects things done or omitted to be. Person not eligible for cenvat availment following persons are. Some of important rules under cenvat credit rules, 2004. Rule 35c sub rule 5c of rule 3 of the cenvat credit rule 2004, provides that. Sub rule 2 of rule 9 provides that, no cenvat credit under sub rule 1 shall be taken unless all the particulars as prescribed under the central excise rules, 2002 or the service tax rules, 1994, as the case may be. Rule 1 short title, extent and commencement cenvat credit rules, 2004 2 they extend to the whole of india. Similarly, interest has also been considerably increased. The amendments in this rule have somewhat revamped the whole rule itself.
Chapter9 proportionate credit mechanism and other issues under rule 6. Provided that provisions of this subrule shall apply mutatis mutandis to an importer who issues an invoice on which cenvat credit can be taken. Some of important rules under cenvat credit rules, 2004 are. Changes in cenvat credit rule 41 and rule 47 from 01. Cenvat credit on deposits insurance banks vs departments. In the cenvat credit rules, 2004 hereinafter referred to as the said rules in rule 4, for subrule 7, the following subrule shall be substituted, namely. Following persons are eligible for cenvat credit under rule 31 of ccr. Trade notice 09201516 minutes of tarrif confrence held on 28. Central excise cenvat credit rules 2004 voice of ca. Apr 14, 2016 the other option in such circumstances is to pay an amount determined as per rule 3a, vide rule 632 of the cenvat credit rules 2004, which allows reversal of proportionate cenvat credit taken. Oct 26, 2012 rule 35c sub rule 5c of rule 3 of the cenvat credit rule 2004, provides that. Where on any goods manufactured or produced by an assessee, the payment of duty is ordered to be remitted waivedoff under rule 21 of central excise rules, 2002, the cenvat credit taken on inputs used in the manufacture or production shall be reversed. A critical study sagar mal pareek penal provisions and interest related new provisions in service tax have been made more stringent by the finance act, 2011 including prosecution.
This credit can be utilized to pay excise duty on final products service tax on output services in accordance with the conditions and restrictions prescribed in cenvat credit rules, 2004. Changes in cenvat credit rules 2004 udyog software india ltd. Rule 47 of cenvat credit rules, 2004 pre budget scenario. We are discussing here the changes made in the cenvat credit rules, 2004 the credit rules under the union budget, 2015 vizaviz existing old provisions for easy digest as under. Return registered dealer quarterly return under rule 9 of the cenvat credit rules, 2004 for the registered dealers see sub rule 8 of rule 9. The credit rules has been streamlined with restructuring of rule 6 of. A new rule 7 has been substituted in the cenvat credit rules, 2004 ccr, 2004 dealing with distribution of cenvat credit of service tax paid on input services, by an input service distributor isd.
Natarajan, advocate, swamy associates the intention behind the move to rewrite rule 6 of the cenvat credit rules, 2004, to make it more user friendly, more liberal and more clear is laudable. Cenvat credit on capital goods has to be availed in two. Central excise job work rules, 2004 as per rule 4 5 a of the cenvat credit rules erstwhile rule 57 f 4 of the central excise rules, 1944 credit availed inputs can be removed, either as such or after being partially processed, to the premises of job workers for further processing, testing, repair, reconditioning or any other purpose. As per subrule 1 of rule 3, a manufacturer or an output service provider can take cenvat credit ofi basic excise duty. For ready reference the new rule 7 is reproduced below. Summary of service tax rule with charts successful people dont do different things. Scope of exempted services for reversal of cenvat credit. The cenvat credit rules 2004 as amended by notification no. Cenvat credit rules, 2004 ccr 2004 have been notified vide notification no. Credit in 1986 followed by modvat in 1987 and then cenvat credit rules, 2001. Changes in rule 63of the cenvat credit rules with effect. An assessee who is a manufacturer of dutiable goods or provider of output services or both invariably receives services on which he pays service tax and is eligible to take credit in terms of rule 31 of the cenvat credit rules,2004.
Rule 16 of cenvat credit rules, 2004 provides transition provisions by. Proviso to rule 94 of the cenvat credit rules, 2004 provisions of rule 94 of the credit rules, 2004 applicable to first stage dealer or second stage dealer shall also apply mutatis mutandis to importer who issues an invoice on which cenvat credit can be taken w. Cenvat credit rules, 2004 superseded the earlier set off schemes to provide cross sectional availment and utilization of credit under excise and service tax. This allows the cenvat credit availed to be utilized for the payment of. The other option in such circumstances is to pay an amount determined as per rule 3a, vide rule 632 of the cenvat credit rules 2004, which allows reversal of proportionate cenvat credit taken. Rule 6 of the cenvat credit rules, 2004 prakhars blog. This paper contains a brief on the changes made to. May 26, 2016 in exercise of the powers conferred by section 37 of the central excise act, 1944 1 of 1944 and section 94 of the finance act, 1994 32 of 1994 and in supersession of the cenvat credit rules, 2002 and the service tax credit rules, 2002, except as respects things done or omitted to.