Eligible Duty / Taxes - Utilization - Removal as such - Write off - reversal - Cenvat Credit Rules, 2004 - Cenvat Credit - Ready Reckoner [OLD] - Cenvat Credit

Chapter 6 Eligible Duty / Taxes - Cenvat Credit Rules, 2004 Reference: Rule - 03 Type of duties allowed as Cenvat Credit FAQ www.taxmanagementindia.com Reply What type of duties or taxes is eligible for Cenvat Credit? Rule 3(1) of CCR, 2004 allows various types of duties, taxes or cess including CVD / SAD that can be availed on Inputs, Input services or Capital Goods by the Manufacturer or Provider of Output services. Rule 3(2) and (3) of CCR, 2004 allows credit on Inputs lying in stock or in process or inputs contained in final products lying in stock when assessee starts paying duty of excise or service tax after claiming exemption. Rule 3(4) of CCR, 2004 allows utilization of Cenvat Credit for certain duties and taxes with some restrictions. One to one correlation is not required for availment of CENVAT i.e. there is no requirement of establishing relation between inputs/ inputs service and final product / output service. Rule 3(5) of CCR, 2004 makes provisions for removal as such. In this case, manufacturer or service provider shall pay an amount equal to the credit availed in respect of such inputs or capital goods and such removal shall be made under the cover of invoice. Except - In case of service provider , if inputs / capital goods are removed outside for providing the output services - In case of manufacturer, if inputs are removed for providing free warranty for final products. Rule 3(5A) of CCR, 2004 makes provisions for payment of amount on removal of capital goods after use after deducting depreciation at certain percentage. Rule 3(5B) of CCR, 2004 makes provisions for written off of goods / obsolete goods. Rule 3(5C) of CCR, 2004 makes provisions for reversal of credit in case of remission of duty. Rule 3(6) of CCR, 2004 amount paid under rule 3(5) and 3(5A) eligible as credit in the hands of recipient. Rule 3(7) of CCR, 2004 makes special provisions for EOU / EHTP / STP etc. Special provision in case of set off of Education cess Secondary and Higher education cess paid on inputs/ capital goods and Input services on or after the 1 st day of March, 2015 (Inserted vide Not. 12/2015 - Dated 30-4-2015 ) Credit by assessee who is manufacturer as well as service provider Cenvat credit of manufacturing activity can be utilised for payment of service tax since there is no such restriction in Cenvat credit rules. There is no provision for segregation of input services in terms of utilised in manufacturer or to output service. Also there is no provision in Cenvat credit rules for segregation of Cenvat credit for payment of excise duty and for payment of service tax.