24/2016-CENT dt. 13-04-2016, Central Excise

[SANDESH SHINDE]

Dear Sir,

Please explain in simple way regarding Central Excise notification Cenvat credit changes 24/2016-CENT dt. 13-04-2016.

Thanks & Regards.

Posts / Replies

[MADAN RAHEJA]

Dear Sir, The effect of changes made in Cenvat Credit Rules, 2004 vide notification No. 24/2016 – CE(NT) dated 13-04-2016, to me appear to be as under:-

1. Fifth proviso of Rule 4(7) has been elaborated to clarify that bar of one year in availing Cenvat Credit will not be applicable in case of services provided by Government, local authority or any other person, by way of assignment of right to use any natural resource. This only clarified the position and should have been done earlier when sixth, seventh and eighth proviso were introduced w.e.f 01-04-2016.

2. Sixth, Seventh and Eighth provisos which were introduced only w.e.f 01-04-2016 have been replaced with two provisos viz. sixth and seventh provisos. In earlier sixth proviso, the Cenvat credit of service tax paid/payable by service recipient was to be spread over period for which right to use natural resources was available with such person. A formula was prescribed thereof. In substituted sixth proviso, the Cenvat credit of service tax actually paid upfront or in installments during any financial year can be spread over evenly during three years. There is no change in seventh proviso. Eighth proviso has been deleted as it had become redundant in view of substituted sixth proviso. Earlier under this proviso Cenvat credit of monthly/annual charges was available in same financial year in which it was paid.

 

[KASTURI SETHI]

Thanks a lot to Sh.Madan Raheja, Sir.

[MARIAPPAN GOVINDARAJAN]

Superb explanation, Sir