Availment of cenvat credit beyond 6 months

[Asked by Guest]

Dear Sir,

We are registered as a Input Service Distributor and if we had availed credit of invoices say of April , May, June 2014 not purposely beyond 6 months then what will be the consequences,please explain,thanks and Regards.

[Rajagopalan Ranganathan]

Dear Mr. Shinde,

Since you have availed the credit after six months from the date of invoice, the credit availed by you is ineligible credit. It is not wrong credit. though you have not utilised/distributed the ineligible credit the same should be reversed with interest and it also attract penalty under rule 15 of Cenvat Credit Rules, 2004.

[Mahir S]

Sir,

Further to add to above reply that, if any such credit availed beyond 6 months period is distributed to other units, then the same shall also be liable to be recovered with interest and penalty, and personal penalty too.

AI Summary

Cenvat credit time-bar consequences: availing late credit requires reversal with interest and may attract penalties.
Availing Cenvat credit after the six month period from the invoice date renders the credit ineligible and requires reversal with interest; such availment also attracts penalty under the Cenvat Credit Rules, 2004. If an Input Service Distributor distributes credit availed beyond the time limit, the distributed amounts are recoverable with interest and penalties and may give rise to personal penalties against responsible persons.