Rule 6(4) of CCR 2004

[CA AJAY KUMAR AGRAWAL]

Newly inserted Rule 6(4) of CCR 2004 (wef 01-04-2016) provides for "Non Availability" of Cenvat Credit on Capital Goods "Exclusively used in manufacture of exempted products / providing exempted services" for a period of 2 Years (& further some conditions / provisions).

My view is that such provision was already there where Cenvat Credit on Capital Goods exclusively used in exempted goods / services was disallowed but where such manufacture was of exempted & dutiable goods / provision of exempted & dutiable services, it was allowed.

Kindly share your views in short what exactly the new provision wants to provide / what is new & different from earlier provision.

AI Summary

Cenvat credit restriction on capital goods temporarily bars credit where used exclusively for exempt outputs, permitting eligibility later.
Rule 6(4) disallows Cenvat credit on capital goods used exclusively for manufacture of exempted goods or provision of exempted services for two years from commercial production or, if received later, from installation; after this period credit may be allowed subject to conditions.