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TIME LIMIT FOR TAKING CENVAT CREDIT

Cenvat Credit - By: - Mr. M. GOVINDARAJAN - Dated:- 23-11-2015 Last Replied Date:- 21-10-2016 - CENVAT credit may be taken and utilized on inputs, capital goods and input services. Rule 4 provides for the conditions for taking the credit including the time limit. In this article the for the above three is to be discussed. Inputs Rule 4 (1) of CENVAT Credit Rules, 2004 ( Rules for short) provides that the CENVAT credit in respect of inputs may be taken- immediately on receipt of inputs- in the fa .....

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on inputs may be taken immediately on receipt of such inputs in the registered premises of the person who get such final products manufactured on his behalf, on job work basis, subject to the condition that the inputs are used in the manufacture of such final product by the job worker; The other condition for taking CENVAT credit on inputs is that the manufacturer or the provider of output service shall not take CENVAT credit after one year of the date of issue of any of the documents specified .....

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n the premises of the job worker, in case capital goods are sent directly to the job worker on the direction of the manufacturer or the provider of output service, as the case may be, at any point of time in a given financial year shall be taken only for an amount not exceeding 50% of the duty paid on such capital goods in the same financial year. The balance of CENVAT credit may be taken in any financial year subsequent to the financial year in which the capital goods were received in the facto .....

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respect of capital goods shall be allowed for the whole amount of the duty paid on such capital goods in the same financial year if such capital goods are cleared as such in the same financial year. The CENVAT credit of the additional duty leviable under Section 3(5) of the Customs Tariff Act, in respect of capital goods shall be allowed immediately on receipt of the capital goods in the factory of a manufacturer. Where an assessee is eligible to avail of the exemption under a notification base .....

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. If the credit is availed on or after the day on which the invoice is received, the payment in respect of the invoice shall be paid within three months from the date of invoice. Otherwise the credit already taken is to be reversed. The manufacturer or the provider of output service shall not take CENVAT credit after one year of the date of issue of any of the documents specified in sub-rule (1) of rule 9. This condition is applicable with effect from 01.03.2015. Before that the time limit is si .....

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t is required to be reversed and credit can be re-taken: Rule 4(7) provides that the credit on input services shall be allowed on receipt of the invoice, bill, challan. But if the bill is not paid within three months the credit taken is to be reversed. Subsequently, when such payments of value input service and service tax is made, the amount so paid back can be re-credited; Rule 3(5B) provides that if the value of any input or capital goods before putting use on which CENVAT credit has been tak .....

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. However, when the inputs are subsequently received back from job worker, the amount so paid can be re-credited in the account. The Circular No. 990/14/2014-CX-8, dated 19.11.2014 clarifies that the purpose of fixing the limitation for taking credit is to ensure that after issue of a document under Rule 9(1), credit is taken for the time within one year of the issue of the document. Once this condition is met, the limitation of one year has no further application. Therefore in the above three s .....

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iew is that the limitation of one year will not be applicable to RCM. - Reply By Chirag Jain - The Reply = Nice Article Sir,As per your article, If the credit is availed on or after the day on which the invoice is received, the payment in respect of the invoice shall be paid within three months from the date of invoice. Otherwise the credit already taken is to be reversed.My query is for Input Service:If the credit is availed on or after the day on which the invoice is received, the payment in r .....

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icable. - Reply By SARAVANAM Ramasamy - The Reply = Dear Sir,Can we take full Credit on imported capital goods in the subsequent year ? ( here the goods received by the unit on Jan 2015 and 50% of credit not taken in the first year ie..2014- 2015 )Is the cenvat credit is eligible for the Custom Duty paid by using Duty Credit Scrips issued under Vishesh Krishi and Gram Udyog Yojana ?Please i need your clarification.Regards,R. Saravanam - Reply By MARIAPPAN GOVINDARAJAN - The Reply = Dear Sir,If 5 .....

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- Reply By Ganeshan Kalyani - The Reply = In my view if 50% credit is not taken in 2014-15 then you will have to take 50% credit in 2015-16 and balance should be taken in 2016-17. - Reply By MARIAPPAN GOVINDARAJAN - The Reply = Dear Sir,If 50% of credit on capital goods is taken in the year 2014-15, then the entire 100% of credit may be taken from 2015-16. There is no time limit for this. You may take even in the year 2018-19. - Reply By SARAVANAM Ramasamy - The Reply = Dear Sirs,Thank u so much .....

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& Regards SAKTHIVEL PONNUSAMY - Reply By MARIAPPAN GOVINDARAJAN - The Reply = Yes, it will be applicable. - Reply By Nitesh Sharma - The Reply = Sir, I want to know what if a purchase bill is recorded after 2 months from the date of invoice?? How will I book that entry and on what date?? Can I take Cenvat Credit on that??Invoice date is 24/05/2016 & Recorded date is 01/08/2016. - Reply By HImanshu Singh - The Reply = Dear Sir, I would Like to ask a query relating to CCR on Captal Goods: .....

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