Here is the highlights of amendments in Cenvat Credit Rules, 2004 through notification no. 3/2011 CE(NT) dated 1.3.2011
Updated Rules are available on taxmanagementindia.com
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Rule
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Nature of amendment
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Effective Date
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1
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2(a)
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Capital Goods – credit allowed on capital goods used outside the factory premises for generation of electricity.
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1.4.2011
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2
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2(d)
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Scope of exempted goods enlarged to deny credit for goods liable to excise duty @1% under notification No.1/2011
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1.3.2011
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3
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2(e)
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Scope of exempted services enlarged to deny credit on trading activity and services under abatement.
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1.4.2011
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4
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2(k)
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Meaning and Scope of Inputs amended substantially.
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1.4.2011
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5
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2(l)
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Meaning and Scope of Input Services amended substantially.
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1.4.2011
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6
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2(naa)
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Meaning of “Manufacture or producer” extended the benefit of credit to job worker / merchant trader
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1.3.2011
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7
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3(1)(a)
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No credit in respect of goods liable to duty @1% under notification No.1/2011- CE
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1.3.2011
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8
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3(1)(b)
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Cenvat Credit of CVD is restricted to 85% in case of ships, boats and other floating structures for breaking up
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1.3.2011
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9
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3(4)
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Restriction on utilization of credit for the goods liable to duty @1% under notification No.1/2011
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1.3.2011
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10
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3(5)
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Removal of goods as such from premises for the purpose of free warranty is allowed without reversal of cenvat credit
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1.4.2011
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11
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3(5B)
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Cenvat Credit is required to be reversed even in case partial written off of goods.
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1.3.2011
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12
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4(2)
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Cenvat Credit can be availed on goods used for generation of electricity outside the factory premises, actual receipt in factory premises not necessary
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1.3.2011
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13
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4(7)
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Return of payment of input services – cenvat credit to be reversed
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1.4.2011
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14
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4 (Explanations)
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Time limit for reversal of credit under rule 4 specified
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1.4.2011
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15
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Failure to reverse credit under rule 4, recovery can be made as per rule 14.
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1.4.2011
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16
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Persons who liable to pay duty / service tax on quarterly basis need to reverse the credit quaryly.
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1.4.2011
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17
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6
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Heading of the rule 6 changed
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1.4.2011
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18.
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6(1)
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Correction in phrase
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1.4.2011
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18.
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6(2)
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Manner of keeping separate records for exempted and taxable goods / services specified
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1.4.2011
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19.
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6(3)
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Option to pay tax / duty on exempted goods / services at the rate of 5%
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1.4.2011
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20.
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6(3)
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One more option added in view of amended rule 6(2)
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1.4.2011
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21.
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6(3)
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No credit on inputs or input services attributable exclusively to exempted goods / services
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1.4.2011
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22.
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6(3A)
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Correction in phrase to calculate credit on exempted goods upto the place of removal
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1.4.2011
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23.
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6(3) (Explanations)
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Three explanations omitted
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1.4.2011
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24.
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6(3B)
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New sub rule – Cenvat Credit restricted to 50% in case of banking and financial institution
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1.4.2011
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25.
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6(3C)
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New Sub rue - Cenvat Credit restricted to 75% in case of life insurance and ULIP
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1.4.2011
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26.
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6(3D)
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Reversal of credit under rule 6(3) shall be treated as non availment of credit.
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1.4.2011
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27.
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6(3) to 6(4D) (Explanations)
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Specified the term “value”, manner of payment, recovery thereof
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1.4.2011
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28.
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6(5)
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Rule 6(5) omitted – this rule was allowing credit on 16 services if used commonly with taxable and exempted services
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1.4.2011
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29.
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6(6A)
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Cenvat Credit on output services supplied to SEZ units allowed
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1.3.2011
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30
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9(7)
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Filing of cenvat credit return in case of SSI units limited to ten day
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1.3.2011
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Updated Rules are available on taxmanagementindia.com
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