Cenvat Credit Rules 2004

[Admin TMI]

Question - What are proposed amendments in Cenvat Credit Rules, 2004 in Finance Bill 2015 ?

[Admin TMI]

Cenvat Credit Rules, 2004

• Rule 4(7) is being amended to allow Cenvat Credit of Service Tax paid under partial reverse charge by the service receiver without linking it to the payment to the service provider. This change will come into effect from 1.4.2015.
• The period for taking Cenvat Credit is being extended from six months from the date of invoice to one year from the date of invoice.
• Certain other changes are being made in the provisions of the Cenvat Credit Rules, 2004, which, inter-alia, include allowing Cenvat Credit on input and capital goods received directly by job workers, defining “export goods” for the purposes of rule 5, defining “exempt goods” for the purposes of rule 6, making applicable the provision of rule 9(4) to importer dealers, authorizing imposition of restrictions on registered dealers under rule 12AAA, and provisions relating to recovery of credit wrongly taken and imposition of penalty. For details, the D.O. letter of J.S (TRU-I) may please be referred to.

AI Summary

Cenvat Credit amendments broaden eligibility and extend the period for taking credit while permitting reverse-charge service credits. Amendments in the Finance Bill 2015 revise the Cenvat Credit Rules, 2004 to allow credit of service tax paid under partial reverse charge by the service receiver without linking it to payment to the provider, extend the credit-taking period from six months to one year from invoice date, and introduce provisions permitting credit on goods received by job workers, definitions for export and exempt goods, application of rule 9(4) to importer-dealers, authorized restrictions on registered dealers under rule 12AAA, and rules for recovery and penalty for wrongly taken credit.