Dr. Sanjiv Agarwal
Change w.e.f. 1 September, 2014
Vide Notification No. 21/2014-CE(NT) dated 11.07.2014, after the second proviso in Rule 4(1)of the Cenvat Credit Rules, 2004, the following proviso was inserted for the first time to fix time limit to avail Cenvat credit –
“Provided also that the manufacturer or the provider of output service shall not take Cenvat Credit after six months of the date of issue of any of the documents specified in sub-rule (1) of rule 9”.
This proviso is effective from 01.09.2014. Earlier, there was no time limit on availment of Cenvat credit. The provisions of Cenvat Credit Rules, 2004 were amended whereby a manufacturer or a service provider shall not take Cenvat credit of inputs, input services after a period of six months from the date of issue of invoice, bill or challan as the case may be. It may be noted that Cenvat credit with respect to invoices / challans / bills which were dated prior to 01.09.2014 shall also be subject to such time restriction.
For example, if Cenvat credit is not yet taken for a bill dated 01.07.2014, such credit could be availed only till 31st December 2014.
Change w.e.f. 1st March, 2015
W.e.f. 1st March 2015, time limit for availment of Cenvat Credit has been extended to one year from the date of invoice. This implies that Cenvat credit on inputs and input services which could be earlier (as provided for w.e.f. 01.09.2014) availed within the period of six months from the date of invoice can now (w.e.f. 1.3.2015) be availed within a period of one year from the date of invoice .
The amendment has been made vide Notification No. 6/2015-CE(NT) dated 1.3.2015 w.e.f. 1.3.2015 wherein the words ‘six months’ have been substituted by words ‘one year’ in third proviso of Rule 4(1) of Cenvat Credit Rules, 2004.
Impact of Change
The amendment w.e.f. 1.3.2015 of allowing time limit of one year instead of six months shall make the amendment made w.e.f. 1.9.2014 redundant because it would cover period of March to September 2014 also. Further, those who could not claim Cenvat credit of invoices issued prior to September, 2014 can now do so as the time limit has been raised from one month to one year. Thus, on all eligible invoices of last one year cenvat credit be availed.
There are many instances where assessees receive input services but do not taken any registration as they are not engaged in providing any taxable service during that period. In such cases, it may be advisable that the assessee must take registration and file periodical returns wherein credit must be duly availed.