Amendments in Cenvat Credit Rules, 2004

Rule

Nature of amendment

Effective Date

1

2(a)

Capital Goods – credit allowed on capital goods used outside the factory premises for generation of electricity.

1.4.2011

2

2(d)

Scope of exempted goods enlarged to deny credit for goods liable to excise duty @1% under notification No.1/2011

1.3.2011

3

2(e)

Scope of exempted services enlarged to deny credit on trading activity and services under abatement.

1.4.2011

4

2(k)

Meaning and Scope of Inputs amended substantially.

1.4.2011

5

2(l)

Meaning and Scope of Input Services amended substantially.

1.4.2011

6

2(naa)

Meaning of “Manufacture or producer” extended the benefit of credit to job worker / merchant trader

1.3.2011

7

3(1)(a)

No credit in respect of goods liable to duty @1% under notification No.1/2011- CE

1.3.2011

8

3(1)(b)

Cenvat Credit of CVD is restricted to 85% in case of ships, boats and other floating structures for breaking up

1.3.2011

9

3(4)

Restriction on utilization of credit for the goods liable to duty @1% under notification No.1/2011

1.3.2011

10

3(5)

Removal of goods as such from premises for the purpose of free warranty is allowed without reversal of cenvat credit

1.4.2011

11

3(5B)

Cenvat Credit is required to be reversed even in case partial written off of goods.

1.3.2011

12

4(2)

Cenvat Credit can be availed on goods used for generation of electricity outside the factory premises, actual receipt in factory premises not necessary

1.3.2011

13

4(7)

Return of payment of input services – cenvat credit to be reversed

1.4.2011

14

4 (Explanations)

Time limit for reversal of credit under rule 4 specified

1.4.2011

15

Failure to reverse credit under rule 4, recovery can be made as per rule 14.

1.4.2011

16

Persons who liable to pay duty / service tax on quarterly basis need to reverse the credit quaryly.

1.4.2011

17

6

Heading of the rule 6 changed

1.4.2011

18.

6(1)

Correction in phrase

1.4.2011

18.

6(2)

Manner of keeping separate records for exempted and taxable goods / services specified

1.4.2011

19.

6(3)

Option to pay tax / duty on exempted goods / services at the rate of 5%

1.4.2011

20.

6(3)

One more option added in view of amended rule 6(2)

1.4.2011

21.

6(3)

No credit on inputs or input services attributable exclusively to exempted goods / services

1.4.2011

22.

6(3A)

Correction in phrase to calculate credit on exempted goods upto the place of removal

1.4.2011

23.

6(3) (Explanations)

Three explanations omitted

1.4.2011

24.

6(3B)

New sub rule – Cenvat Credit restricted to 50% in case of banking and financial institution

1.4.2011

25.

6(3C)

New Sub rue - Cenvat Credit restricted to 75% in case of life insurance and ULIP

1.4.2011

26.

6(3D)

Reversal of credit under rule 6(3) shall be treated as non availment of credit.

1.4.2011

27.

6(3) to 6(4D) (Explanations)

Specified the term “value”, manner of payment, recovery thereof

1.4.2011

28.

6(5)

Rule 6(5) omitted – this rule was allowing credit on 16 services if used commonly with taxable and exempted services

1.4.2011

29.

6(6A)

Cenvat Credit on output services supplied to SEZ units allowed

1.3.2011

30

9(7)

Filing of cenvat credit return in case of SSI units limited to ten day

1.3.2011