9911796707
TMI BlogObligation of manufacturer of dutiable and exempted goods and provider of taxable and exempted servicesX X X X Extracts X X X X X X X X Extracts X X X X ..... n clauses (d) and (h) of rule 2 shall include non-excisable goods cleared for a consideration from the factory. Explanation 2.- Value of non-excisable goods for the purposes of this rule, shall be the invoice value and where such invoice value is not available, such value shall be determined by using reasonable means consistent with the principles of valuation contained in the Excise Act and the rules made there under. Explanation 3. - For the purposes of this rule, exempted services as defined in clause (e) of rule 2 shall include an activity, which is not a 'service' as defined in section 65B(44) of the Finance Act, 1994 50[provided that such activity has used inputs or input services]. Explanation 4. - Value of such an activity as specified above in Explanation 3, shall be the invoice/agreement/contract value and where such value is not available, such value shall be determined by using reasonable means consistent with the principles of valuation contained in the Finance Act, 1994 and the rules made thereunder.] 42[(2) A manufacturer who exclusively manufactures exempted goods for their clearance upto the place of removal or a service provider who exclusively provides exemp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oval; (c) "non-exempted services" means the output services excluding exempted services. ] 44[(3A) For determination of amount required to be paid under clause (ii) of sub-rule (3), the manufacturer of goods or the provider of output service shall follow the following procedure and conditions, namely :- (a) the manufacturer of goods or the provider of output service shall intimate in writing to the Superintendent of Central Excise giving the following particulars, namely :- (i) name, address and registration number of the manufacturer of goods or provider of output service; (ii) date from which the option under this clause is exercised or proposed to be exercised; (iii) description of inputs and input services used exclusively in or in relation to the manufacture of exempted goods removed or for provision of exempted services and description of such exempted goods removed and such exempted services provided; (iv) description of inputs and input services used exclusively in or in relation to the manufacture of non-exempted goods removed or for the provision of non-exempted services and description of such non-exempted goods removed and non-exempted services provid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nation.- For the removal of doubts, it is hereby declared that out of the total credit T, which is sum total of A, B, D, and G, the manufacturer or the provider of the output service shall be able to attribute provisionally and retain credit of B and G, namely, eligible credit and eligible common credit and shall provisionally pay the amount of credit of A and D, namely, ineligible credit and ineligible common credit. (vi) where manufacturer or the provider of the output service fails to pay the amount determined under sub-clause (i) or sub-clause (iv), he shall be liable to pay the interest from the due date of payment till the date of payment of such amount, at the rate of fifteen per cent. per annum; (c) the manufacturer or the provider of output service shall determine the amount of CENVAT credit attributable to exempted goods removed and provision of exempted services for the whole of financial year, out of the total credit denoted as T (Annual) taken during the whole of financial year in the following manner, namely :- (i) the CENVAT credit attributable to inputs and input services used exclusively in or in relation to the manufacture of exempted goods removed or for pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e common credit paid during the whole year and the total of the amount of annual ineligible credit and annual ineligible common credit, namely, [{(A+D) aggregated for the whole year)} - {A(Annual) + D(Annual)}], where the former of the two amounts is greater than the later; (g) the manufacturer of the goods or the provider of output service shall intimate to the jurisdictional Superintendent of Central Excise, within a period of fifteen days from the date of payment or adjustment, as per the provisions of clauses (d), (e) and (f) , the following particulars, namely :- (i) details of credit attributed towards eligible credit, ineligible credit, eligible common credit and ineligible common credit, month-wise, for the whole financial year, determined as per the provisions of clause (b); (ii) CENVAT credit annually attributed to eligible credit, ineligible credit, eligible common credit and ineligible common credit for the whole of financial year, determined as per the provisions of clause (c); (iii) amount determined and paid as per the provisions of clause (d), if any, with the date of payment of the amount; (iv) interest payable and paid, if any, determined as per the provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... availed, shall be the value on which the rate of service tax under section 66B of the Finance Act, read with an exemption notification, if any, relating to such rate, when applied for calculation of service tax results in the same amount of tax as calculated under the option availed; or (c) in case of trading, shall be the difference between the sale price and the cost of goods sold (determined as per the generally accepted accounting principles without including the expenses incurred towards their purchase) or ten per cent of the cost of goods sold, whichever is more. (d) in case of trading of securities, shall be the difference between the sale price and the purchase price of the securities traded or one per cent. of the purchase price of the securities traded, whichever is more. (e) shall not include the value of services by way of extending deposits, loans or advances in so far as the consideration is represented by way of interest or discount]; 52[ Provided that this clause shall not apply to a banking company and a financial institution including a non-banking financial company, engaged in providing services by way of extending deposits, loans or advances. ] Explana ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se or supplied to projects funded by them, on which exemption of duty is available under notification of the Government of India in the Ministry of Finance (Department of Revenue) No.108/95-Central Excise, dated the 28th August, 1995, number G. S R. 602 (E), dated the 28th August, 1995; or 9[(iva) supplied for the use of foreign diplomatic missions or consular missions or career consular offices or diplomatic agents in terms of the provisions of 28[12/2012-Central Excise, dated the 17th March, 2012, number G.S.R. 163(E), dated the 17th March, 2012] or] (v) cleared for export under bond in terms of the provisions of the Central Excise Rules, 2002; or (vi) gold or silver falling within Chapter 71 of the said First Schedule, arising in the course of manufacture of copper or zinc by smelting; or. 8[(vii) all goods which are exempt from the duties of customs leviable under the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) and the additional duty leviable under sub-section (1) of section 3 of the said Customs Tariff Act when imported into India and are supplied,- (a) against International Competitive Bidding; or (b) to a power project from which power supply has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... "newsprint, in rolls, sheets or reels, falling within Chapter 48" has been substituted vide notification no. 7/2007 CE(NT) dated 21-2-2007 3. After Explanation II, Explanation III has been inserted with effect from the 1st day of April, 2007, namely:-vide Notification No. 10/2007 CE (NT) dated 1/3/2007) 4. in sub-rule (1) for the words, "exempted goods or exempted services", the words, "exempted goods or for provision of exempted services" has been substituted vide notification no. 10/2008 dated 1-3-2008 with effect from 1-4-2008 5. Sub-rule (3) has been substituted (and 3A has been inserted) with effect from 1-4-2008 vide notification no. 10/2008 CE(NT) dated 1-3-2008, before substitution it was read as under: (3) Notwithstanding anything contained in sub-rules (1) and (2), the manufacturer or the provider of output service, opting not to maintain separate accounts, shall follow either of the following conditions, as applicable to him, namely:- (a) if the exempted goods are- [1] (i) goods falling within heading 2207 of the First Schedule to the Excise Tariff Act (hereinafter in this rule referred to as the said First Schedule); (ii) Low Sul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nation II.- If the manufacturer or provider of output service fails to pay the said amount, it shall be recovered along with interest in the same manner, as provided in rule 14, for recovery of CENVAT credit wrongly taken. (d) notwithstanding anything contained in condition (c), the provider of output service referred to in sub-clause (d) of clause (105) of section 65 of the Finance Act has the option to utilise CENVAT credit attributable to inputs and input services used in providing taxable services subject to the following, namely:- (i) while exercising the option under this condition, the provider of output service shall intimate his option in writing to the Superintendent of Central Excise giving the following particulars, namely:- (a) name and address of the provider of output service; (b) date from which the option under this clause is exercised or proposed to be exercised; (c) description of taxable services; (d) description of exempted services; (e) CENVAT credit of inputs and input services lying in balance as on the date of exercising the option under this condition; (ii) the option given under part (i) for a financial year shall not be withdrawn during the remai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hwise as per part (iii)item(b), (c) CENVAT credit attributable to exempted services for the whole financial year as determined as per part (iii) item (c), (d) amount short paid determined as per part (iii) item (d), alongwith the date of payment of the amount short paid, (e) interest payable and paid, if any, on the amount short paid, determined as per part (iii) item (e), and (f) credit taken on account of excess payment, if any, determined as per part (iii)item(f); (v) where the amount equivalent to CENVAT credit attributable to exempted services can not be determined provisionally since no taxable service referred to in sub-clause (d) of clause (105) of section 65 of the Finance Act has been provided, the provider of output service is not required to determine, provisionally, and pay CENVAT credit attributable to exempted services for each month but he shall determine the CENVAT credit attributable to exempted services for the whole year as prescribed in part (iii) item (c) and pay the amount so calculated on or before 30th June of the succeeding financial year. (vi) where the amount determined under part (v) is not paid within the said due date i.e. the 30th June, the pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y or tax as well as exempted goods or services, then, the manufacturer or provider of output service shall maintain separate accounts for receipt, consumption and inventory of input and input service meant for use in the manufacture of dutiable final products or in providing output service and the quantity of input meant for use in the manufacture of exempted goods or services and take CENVAT credit only on that quantity of input or input service which is intended for use in the manufacture of dutiable goods or in providing output service on which service tax is payable." 13. Substituted vide notification no. 3/2011 CE(NT) dated 1.3.2011 w.e.f. 1.4.2011, before it was read as, "either" 14. Substituted vide notification no. 3/2011 CE(NT) dated 1.3.2011 w.e.f. 1.4.2011, before it was read as, " 7[(i) the manufacturer of goods shall pay an amount equal to five per cent. of value of the exempted goods and the provider of output service shall pay an amount equal to six per cent. of value of the exempted services; or] (ii) the manufacturer of goods or the provider of output service shall pay an amount equivalent to the CENVAT credit attributable to inputs and input services used ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ide notification no. 3/2011 CE(NT) dated 1.3.2011 w.e.f. 1.4.2011 22. Substituted vide notification no. 13/2011 CE(NT) dated 31.3.2011 w.e.f. 1.4.2011, before it was read as, "shall be the difference between the sale price and the purchase price of the goods traded" 23. Substituted vide notification no. 18/2012 CE(NT) dated 17-3-2012, w.e.f. 1-4-2012, before it was read as, "five per cent." 24. Substituted vide notification no. 18/2012 CE(NT) dated 17-3-2012, w.e.f. 1-4-2012, before it was read as, "five per cent." 25. Omitted vide notification no. 18/2012 CE(NT) dated 17-3-2012, w.e.f. 1-4-2012, before it was read as, "(3C) Notwithstanding anything contained in sub-rules (1), (2), (3) and (3B), a provider of output service providing taxable services as specified in sub-clauses (zx) and (zzzzf) of clause (105) of section 65 of the Finance Act, shall pay for every month an amount equal to twenty per cent. of the CENVAT credit availed on inputs and input services in that month." 26. Inserted vide notification no. 18/2012 CE(NT) dated 17-3-2012, w.e.f. 1-4-2012 27. Substituted vide notification no. 18/2012 CE(NT) dated 17-3-2012, w.e.f. 1-4-2012, before it was read as, "(3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re".]. 36. Inserted vide Notification No. 21/2014-Central Excise (N.T.) dated 11th July, 2014 w.e.f. 11th day of July, 2014. 37. Inserted vide Not. 06/2015 - Dated 1-3-2015 w.e.f. 1st day of March, 2015 38. Inserted vide Not. 14/2015 - Dated 19-5-201 w.e.f. 1st of June, 2015 39. Substituted vide Not. 14/2015 - Dated 19-5-201, w.e.f. 1st of June, 2015, before it was read as, 24[six per cent.] 40. Inserted vide Not. 21/2015 - Dated 7-10-2015. 41. Substituted vide Not. 13/2016 - Dated 1-3-2016, w.e.f. 1st April, 2016, before it was read as, "(1) The CENVAT credit shall not be allowed on such quantity of 11[input used in or in relation to the manufacture of exempted goods or for provision of exempted services, or input service used in or in relation to the manufacture of exempted goods and their clearance upto the place of removal or for provision of exempted services] except in the circumstances mentioned in sub-rule (2). Provided that the CENVAT credit on inputs shall not be denied to job worker referred to in rule 12AA of the Central Excise Rules, 2002, on the ground that the said inputs are used in the manufacture of goods cleared without payment of duty under the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of value of the] exempted services; or (ii) pay an amount as determined under sub-rule (3A); or (iii) maintain separate accounts for the receipt, consumption and inventory of inputs as provided for in clause (a) of sub-rule (2), take CENVAT credit only on inputs under subclauses (ii) and (iv) of said clause (a) and pay an amount as determined under sub-rule (3A) in respect of input services. The provisions of sub-clauses (i) and (ii) of clause (b) and subclauses (i) and (ii) of clause (c) of sub-rule (3A) shall not apply for such payment: Provided that if any duty of excise is paid on the exempted goods, the same shall be reduced from the amount payable under clause (i): Provided further that if any part of the value of a taxable service has been exempted on the condition that no CENVAT credit of inputs and input services, used for providing such taxable service, shall be taken then the amount specified in clause (i) shall be 39[seven] of the value so exempted."; 32[Provided that in case of transportation of goods or passengers by rail the amount required to be paid under clause (i) shall be an amount equal to 2 per cent. of value of the exempted services.] Explanation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctured and removed plus the total value of 33[output] services provided plus the total value of exempted services provided, during the preceding financial year and D denotes total CENVAT credit taken on inputs during the month minus A; (iii) the amount attributable to input services used in or in relation to manufacture of exempted goods 16[and their clearance up to the place of removal] or provision of exempted services (provisional) = (E/F) multiplied by G, where E denotes total value of exempted services provided plus the total value of exempted goods manufactured and removed during the preceding financial year, F denotes total value of taxable and exempted services provided, and total value of dutiable and exempted goods manufactured and removed, during the preceding financial year, and G denotes total CENVAT credit taken on input services during the month; (c) the manufacturer of goods or the provider of output service, shall determine finally the amount of CENVAT credit attributable to exempted goods and exempted services for the whole financial year in the following manner, namely:- (i) the amount of CENVAT credit attributable to inputs used in or in relation to manufa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t or adjustment, as per condition (d) and (f) respectively, the following particulars, namely:- (i) details of CENVAT credit attributable to exempted goods and exempted services, monthwise, for the whole financial year, determined provisionally as per condition (b), (ii) CENVAT credit attributable to exempted goods and exempted services for the whole financial year, determined as per condition (c) (iii) amount short paid determined as per condition (d), alongwith the date of payment of the amount short-paid, (iv) interest payable and paid, if any, on the amount short-paid, determined as per condition (e), and (v) credit taken on account of excess payment, if any, determined as per condition (f); (h) where the amount equivalent to CENVAT credit attributable to exempted goods or exempted services cannot be determined provisionally, as prescribed in condition (b), due to reasons that no dutiable goods were manufactured and no 33[output] service was provided in the preceding financial year, then the manufacturer of goods or the provider of output service is not required to determine and pay such amount provisionally for each month, but shall determine the CENVAT credit attr ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
