Cenvat Credit

[Sanjeev Sharma]

A Service Provider providing Chargeable and Exempted service both was paying service tax after taking CENVAT credit of input which are used only in taxable services in accordance with old rule 6(2).

Now with the changes in Budget 2016, what are the compliance to be done by that service provider who is taking credit of only those input which are directly used in taxable services. He is not taking any credit for common services. Is the Service Provider has to submit any declaration required under Rule 6(3A)

AI Summary

Cenvat credit compliance requires mixed-service providers to follow option-based reversal or submit the prescribed declaration.
Service providers supplying both taxable and exempt services must follow the amended rule's options for mixed providers: either pay the specified percentage of value of exempted services subject to statutory ceilings or determine payment under the detailed formula; if common credit is nil because no credit is taken on common inputs or services, the formula yields nil liability but the provider should submit the prescribed declaration to the Range superintendent, with that option remaining for the rest of the financial year and subject to departmental verification.