TaxTMI 
TaxTMI 
Dear Sirs, 1)Is there a mandate in the cenvat credit rules that in a case where there is both exempted and taxable output services,the apportionmemt of credit has to be done irrespective of the fact that the input service is exclusively used for providing taxable service.2)What is the status of unutilised credit available on 31-03-2008,is old rule applicable or the new rule of apportionment.3)Can vacant land rent be considered as exempted service
Clarification - Cenvat Credit
05 Oct 2008 
2 Replies 
1402 Views Asked by
Cenvat credit apportionment required when both exempt and taxable services exist; record choice affects availment and lapse.
Cenvat credit for input services used where both taxable and exempt output services exist must follow Rule 6 apportionment options; taxpayers must either maintain separate records of utilisation or apply the common apportionment mechanism. The departmental stance is that unutilised credit at the transitional date will lapse under apportionment rules, a disputed point. Renting of vacant land, being a non-taxable form of renting of property, is treated as an exempted service under the rules. (AI Summary)
Cenvat credit for input services used where both taxable and exempt output services exist must follow Rule 6 apportionment options; taxpayers must either maintain separate records of utilisation or apply the common apportionment mechanism. The departmental stance is that unutilised credit at the transitional date will lapse under apportionment rules, a disputed point. Renting of vacant land, being a non-taxable form of renting of property, is treated as an exempted service under the rules. (AI Summary)