Method of determination of Cenvat Credit attributable to manufacturing of exempted goods and provision of exempted services - Rule 6(3A) of Cenvat Credit Rules 2004
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Rule 6 of Cenvat Credit rules, 2004Â has been amended to withdraw the facility of utilization of cenvat credit upto 20% of output service tax in case taxable and exempted services are being provided together without maintaining separate records.
Instead, a simple as well as complex method is introduced to deal with the situation. The amended facility is available to both i.e. the manufacture and the service provider. By following a simple method: -
Manufacturer shall pay 10% amount on exempted goods and Service Provider shall pay 8% amount on exempted services. [Sub Rule 3 of Rule 6]
By following complex method, as an alternate, the manufacturer or service provider shall find the credit attributable to exempted goods and exempted services are reverse the same. This exercise is to be done monthly on provisional basis and year on the basis of actual details. [Sub Rule 3A of Rule 6]
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Month Wise Calculation - Provisional
Step One - Provisionally determine the CC attributable to Input used in manufacturing of Exempted Goods. It is to be done on actual basis without using any formula.
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Step Two - Provisionally determine the CC attributable to inputs used in exempted services
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Step Tree - Provisionally determine the CC attributable to inputs used in exempted goods and exempted services
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For the whole financial year - Final Calculation
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Step four - Final Determination of CC attributable to inputs used in exempted goods.
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Step Five - Final determination the CC attributable to inputs used in exempted services
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Step Six - Final determination of the CC attributable to inputs used in exempted goods and exempted services
Consequence of Final Determination:
1Â Â Â Â Â Â Where the amount of CC after final determination is more than the amount paid monthly - The difference is to be paid on or before 30th June, next year. For delayed payment, interest @24% shall be paid.
2Â Â Â Â Â Â Â Where the amount of CC after final determination is less than the amount paid monthly - The difference is to be self adjusted.
3Â Â Â Â Â Â Â Â Intimation shall be submitted with the Superintendent in the prescribed form within 15 days from the date of payment or adjustment.
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