Cenvat Credit Admissibility

[Paras Ghorawat]

Dear All

We are a Multi-Product company and having a lot of factories in different geographies in India. Recently we have planned a to set-up a factory in Odisha and taken Excise Registration and Service Tax registration for same in 2011.

We are started to receive services like Security Services, Feasibility Reports and Human Health Assessment study, Environment clearance study and all. We are accumulating cenvat of that in a 'Recievbale GL Code'

Return has not been filled for Excise Registration yet.

Now in 2013 We have decided not to establish that plant there and planning to shift the same in another running plant which has registration no.

In 2012 Budget. Word 'setting up a factory' has been deleted from Input Service definition.

How can we take the credit against these services.

[YAGAY andSUN]

Dear Paras,

There were  drastic  changes in the definition of Input Services w.e.f. 01-04-2011 through a myopic view had been taken by the Department by deleting the words/phrases, such as, business activities, setting up a factory  However, prior to April'2011, you had availed the CENVAT credit on such services, then, the same would remain valid. 

You may transfer the accumulated CENVAT credit to another factory premises situated at another location under intimation to jurisdictional Commissioner of Service Tax.

Regards

Team YAGAY & SUN (Indirect Tax Consultants)

 

AI Summary

Cenvat credit on input services remains valid if lawfully availed and can be transferred to another registered factory with intimation. Admissibility of CENVAT credit on input services depends on lawful availment at the time services were received; amendments removing 'setting up a factory' from the Input Services definition do not invalidate credit validly taken before the change. Accumulated credit at a non operational registered unit may be transferred to another registered factory, provided the transfer follows procedural safeguards and is intimated to the jurisdictional Commissioner of Service Tax.