Rule 6(3a)

[saraswathi P]

Dear Sir,

As per Rule 6(3a) for reversal of Input cenvat credit on exempted goods sale or exempted service, as per formula Total exempted sales + service divided by total sales x total input cenvat credit availed during the month. Pls let me know total input cenvat credit availed during the month includes credit taken on the capital goods ??

 

AI Summary

No need to reverse CENVAT credit for capital goods used in both exempted and dutiable goods under Rule 6(3a). A query was raised regarding the reversal of input CENVAT credit under Rule 6(3a) when dealing with exempted goods or services. The question was whether the total input CENVAT credit availed during the month should include credit taken on capital goods. The response clarified that it is a settled legal position that if capital goods are used in manufacturing both exempted and dutiable goods, there is no need to proportionately reverse the CENVAT credit under Rule 6(3a) of the Cenvat Credit Rule, 2004.