Rule 6 of CENVAT Credit Rules relating to reversal of credit was amended vide Notification No. 13/2016- Central Excise (NT), Dated: March 1, 2016 to provide that a manufacturer/ provider of output service manufacturing/ providing taxable as well as exempted goods/ services may pay an amount equal to 6% of value of the exempted goods and 7% of value of the exempted services subject to a maximum of the total credit available in the account of the assessee at the end of the period to which the payment relates.
However, para h(iii) of Annexure II of F. No. 334/8/2016-TRU dated 29th February 2016 has explained this amendment by stating that the option to pay an amount equal to 6% of value of the exempted goods and 7% of value of the exempted services is subject to a maximum of the total credit taken or pay an amount as determined under sub-rule (3A).
Now, the Central Government has issued Notification No. 23/2016-Central Excise (N.T.), Dated: April 1, 2016 and inserted an amendment to Rule 6(3) of CENVAT Credit Rules to provide that the cap on the said reversal required will be subject to a maximum of the sum total of opening balance of the credit of input and input services available at the beginning of the period to which the payment relates and the credit of input and input services taken during that period.
Further, Rule 7B of CENVAT Credit Rules has also been amended to provide that for distribution of credit on inputs by warehouse of manufacturer, the manufacturer must receive inputs under cover of“Documents specified in Rule 9”. Prior to this amendment, the warehouse could pass on credit of inputs received under cover of invoice issued under Central Excise Rules, 2002 only. With this amendment, credit can be passed even on imported inputs and inputs received from dealers.
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
(DEPARTMENT OF REVENUE)
NOTIFICATION No. 23/2016- Central Excise (N.T.)
New Delhi, the 01st April, 2016
G.S.R. 390(E). – In exercise of the powers conferred by section 37 of the Central Excise Act, 1944 (1 of 1944) and section 94 of the Finance Act, 1994 (32 of 1994), the Central Government hereby makes the following rules further to amend the CENVAT Credit Rules, 2004, namely‑
1. (1) These rules may be called the CENVAT Credit (Fourth Amendment) Rules, 2016.
(2) They shall come into force from the date of their publication in the official Gazette.
2. In the CENVAT Credit Rules, 2004,-
(a) in rule 6, in sub-rule (3) for clause (i), the following clause shall be substituted , namely :-
“(i) pay an amount equal to six per cent. of value of the exempted goods and seven per cent. of value of the exempted services subject to a maximum of the sum total of opening balance of the credit of input and input services available at the beginning of the period to which the payment relates and the credit of input and input services taken during that period; or” ;
(b) in rule 7B, in sub-rule (1) for the words and figures “invoices, issued in terms of the provisions of the Central Excise Rules, 2002,” the words and figure “documents specified under rule 9,” shall be substituted.
[F. No.267/17/2016-CX.8]
(Shankar Prasad Sarma)
Under Secretary
Note.– The principal rules were published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide notification No. 23/2004 – Central Excise (N.T.) dated the 10th September, 2004 vide number G.S.R. 600(E) dated the 10th September, 2004 and last amended vide notification No. 13/2016(N.T.)- Central Excise (N.T.) dated 1st March, 2016 published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 244 (E) , dated the 1st March, 2016.
