TMI BlogSeeks to further amend the CENVAT Credit Rules, 2004.X X X X Extracts X X X X X X X X Extracts X X X X ..... ce used in an office shall be omitted; (iii) in condition (1A), after the words generation of electricity , the words or for pumping of water shall be inserted; (b) in clause (e), after entry (3), for the long line, the following shall be substituted with effect from 1st March, 2016, namely:- but shall not include a service (a) which is exported in terms of rule 6A of the Service Tax Rules, 1994; or (b) by way of transportation of goods by a vessel from customs station of clearance in India to a place outside India; ; (c) in clause (k),- (i) in sub-clause (iii), after the words or steam , the words or pumping of water shall be inserted; (ii) in sub-clause (iv), for the words output service , the words output service; or shall be substituted; (iii) after sub-clause (iv) as so amended, the following sub-clause shall be inserted, namely:- (v) all capital goods which have a value upto ten thousand rupees per piece . ; (iv) for item (C), the following item shall be substituted, namely:- (C) capital goods, except when,- (i) used as parts or components in the manufacture of a final product; or (ii) the value of such capital go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ii) a job worker for the production of goods on his behalf, according to his specifications: Provided that such credit shall also be allowed where jigs, fixtures, moulds and dies or tools falling under Chapter 82 of the First Schedule to the Excise Tariff Act , are sent by the manufacturer of final products to the premises of another manufacturer or job worker without bringing these to his own premises. ; (c) in sub-rule (6), for the words 'valid for a financial year , the words valid for three financial years shall be substituted. (d) in sub-rule (7), after the fifth proviso, the following provisos shall be inserted namely,- Provided also that CENVAT Credit of Service Tax paid on the charges paid or payable for the service provided by way of assignment, by the Government or any other person, of the right to use any natural resource, shall be spread over such period of time as the period for which the right to use has been assigned. CENVAT Credit in the financial year in which the right to use is acquired and in the subsequent years during which such right is retained by the manufacturer of goods or provider of output service as the case may be, shall be tak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation 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. 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. ; (b) for sub-rule (2), the following sub-rule shall be substituted, namely:- (2) A manufacturer who exclusively manufactures exempted goods for their clearance upto the place of removal or a service provider who exclusively provides exempted services shall pay the whole amount of credit of input and input services and shall, in effect, not be eligible for credit of any inputs and input services. ; (c) for sub-rule (3), the following sub-rule shall be substituted, namely:- (3) (a) A manufacturer who manufactures two classes of goods, namely :- (i) non-exempted goods removed; (ii) exempted goods removed; or (b) a provide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rer 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 provided ; (v) CENVAT credit of inputs and input services lying in balance as on the date of exercising the option under this condition; (b) the manufacturer of final products or the provider of output service shall determine the credit required to be paid, out of this total credit of inputs and input services taken during the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dit 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 provision of exempted services on the basis of inputs and input services actually so used during the financial year, shall be called Annual ineligible credit and denoted as A(Annual); (ii) the CENVAT credit attributable to inputs and input services used exclusively in or in relation to the manufa ..... 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(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 provisions of clause (e); and (v) credit determined and taken as per the provisions of clause (f), if any, with the date of taking the credit. (e) after sub-rule (3A), the following sub-rules shall be inserted, namely:- (3AA) Where a manufacturer or a provider of ou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch capital goods. (h) in sub-rule (7), after the words when a service is exported , the words or when a service is provided or agreed to be provided by way of transportation of goods by a vessel from customs station of clearance in India to a place outside India shall be inserted with effect from 1st March, 2016. 6. For rule 7 of the said rules, the following rule shall be substituted, namely:- 7. Manner of distribution of credit by input service distributor.-The input service distributor shall distribute the CENVAT credit in respect of the service tax paid on the input service to its manufacturing units or unit providing output service or an outsourced manufacturing units, as defined in Explanation 4, subject to the following conditions, namely :- (a) the credit distributed against a document referred to in rule 9 does not exceed the amount of service tax paid thereon; (b) the credit of service tax attributable as input service to a particular unit shall be distributed only to that unit; (c) the credit of service tax attributable as input service to more than one unit but not to all the units shall be distributed only amongst such units to which the inp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n over for some or all the units in the preceding financial year, the last quarter for which details of turnover of all the units are available, previous to the month or quarter for which credit is to be distributed. Explanation 4. For the purposes of this rule, outsourced manufacturing unit means a job-worker who is liable to pay duty on the value determined under rule 10A of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 on the goods manufactured for the input service distributor or a manufacturer who manufactures goods, for the input service distributor under a contract, bearing the brand name of such input service distributor and is liable to pay duty on the value determined under section 4A of the Excise Act. . 7. After rule 7A of the said rules, the following rule shall be inserted, namely:- 7B. Distribution of credit on inputs by warehouse of manufacturer. - (1) A manufacturer having one or more factories, shall be allowed to take credit on inputs received under the cover of an invoice issued by a warehouse of the said manufacturer, who receives inputs under cover of invoices, issued in terms of the provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X
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