Contact us   Feedback   Annual Subscription   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Extracts
Home List
← Previous Next →

Restrictions under Cenvat Credit Rules- An analysis

Service Tax - By: - ashish chaudhary - Dated:- 21-8-2015 - Cenvat Credit scheme is designed to avoid cascading effects but it has been seen over a period that the government has been diluting the basic philosophy of the rule by introducing many arbitrary restrictions. This has been done to augment revenue without increasing the tax rates. Paper writer has made an attempt to analyse the restrictions and raise some possibilities as under: Partially using motor vehicle for renting: Motor vehicles f .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

service covers those services which are exempted from whole of duty of service tax leviable thereon. It may be possible that a service provider has been providing multiple services few of which could be taxable while other may be covered by mega exemption notification. Unlike Central Excise, where it is compulsory to avail unconditional exemption notification, there is no such compulsion under service tax. Service provider may opt to charge service tax and may take full credit. This decision to .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

passed on through endorsement of manufacturer s bill. (Gujarat HC in case of Darshan Industries). Similar option may be examined on imported goods to be purchased from importer also by way of endorsement. Splitting of works contract to avail credit on labour portion:A contract may also be in 2 parts ( contracts). An independent contract of sale with penalties for delayed supply, testing terms. A separate contract of service with conditions for (no artificial splitting). Credit of service tax ch .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

used in the business. e.g. mobile bills are taken in the name of company but these would invariably be used for personal calls by employees. Assessee may take credit of say 90% of ST treating balance 10% as attributable to personal usage of employees. Shifting of place of removal to buyer premise: Outward transportation credit is allowed upto the place of removal. Goods may be delivered FOR basis making the buyer premise as place of removal. Credit of service tax on expenditure incurred till tha .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ice: Restriction of one year from the date of invoice hasbeen imposed on availment of credit on input/input service. (Not on capital goods) However, this may not cover the following situations: Rejected/ returned goods on which credit availed under Rule 16 of Central Excise Rules. Past Credits availed and reversed under protest due to oral/ written instructions from revenue officers. Re-credit of credit reversed for non receipt of inputs sent on job work. Re-credit of written off/ provision made .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

elapsed, the credit can be availed where it can be proved that the invoice was issued against a service which was not provided in whole or part or where amount is renegotiated due to deficient provision of service or any terms in contract. In these situations, vendor may be asked to issue credit note for old invoice and to reissue new invoice as per new agreed terms based on which credit may be taken. Payment of service tax under RCM without awaiting payment to vendor: In case of RCM, liability .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ility of department questioning the excess paid service tax. Option under Rule 6: Rule 6 cast obligation on manufacturer/service provider to reverse the credit attributable to manufacture of exempted goods/provision of exempted service. Many times, dilemma arises as to choosing a particular option. Following could be guiding factors: Capital Goods: Credit on Capital goods used exclusively for manufacture or exempted goods or provision of exempted services would not be available. Therefore if use .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version