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of <h1>MODVAT Credit Limit Clarified: 95% Restriction Exempt for Certain Transactions; Applies to Intra-Unit Transfers, Rules 57A, 57B.</h1> The circular clarifies the restriction of MODVAT credit to 95% of input duty as per notifications dated 2.6.98. It addresses various scenarios under MODVAT rules, specifying that transactions under Rules 57F(4), 57F(6), and 57F(7) are exempt from this restriction. However, the 95% restriction applies to intra-unit transfers within the same company and transactions under Rules 57A and 57B. For transactions under Rules 57E, 57G(9), and 57H, the restriction applies only to inputs received on or after 2nd June 1998. The restriction does not apply to specified petroleum products, where credit is calculated at 10% ad valorem.
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