CA Pratik Anand
The CBEC has issued circular No. 990/14/2014-CX-8
dt. 19/11/2014, wherein it has clarified that the cenvat reversed or amount paid
for reversal in respect of cenvat credit wrongly availed where the
conditions relating to availment of cenvat credit were not fulfilled,
can again be claimed as input credit on the fulfilment of prescribed conditions
even after six months from the date of issue of a document (i.e invoice challan
etc) prescribed under rule 9(1) of Cenvat Credit Rules’2004.
The CBEC has clarified
that the limit of availing cenvat credit within six months from date of the
issue of document under rule 9(1) is applicable where cenvat credit is
taken for the first time. It would not apply for taking
re-credit of amount reversed, after meeting the conditions prescribed in the
Cenvat Credit Rules’2004.
The situations wherein
this clarification is applicable is as follows:
1) Newly inserted third
proviso to Rule 4(7) provides that if the value of input service as
well as service tax thereon is not paid within a period of three
months from the date of the invoice etc., the manufacturer or the
service provider who has taken credit on such input service has to make payment
of an amount equal to the CENVAT Credit availed. It is further clarified that
said payment of reversal may be made by cash or through debiting Cenvat credit.
This proviso does not apply to cases where 100% of the service tax is
to be paid by the recipient.
Therefore if a manufacturer or service
provider could not pay the value of input service availed as well as the
service tax thereon within 3 months of raising of invoice then the CCR has to
be reversed. The CCR can be re-taken on payment of the amount of service as
well as the service tax thereon even after expiry of six months from the date
of invoice.
2) According to Rule
3(5B) of CCR, 2004, if the value of any input or capital goods before being put
to use on which CENVAT Credit has been taken, is written off or such provisions
made in Books of Account, the manufacturer or service provider is
required to pay an amount equal to credit so taken. However, when the inputs or
capital goods are subsequently used, the amount so paid can be re-credited in
the account i.e cenvat credit can be re-taken even after expiry of six months
from the date of invoice for the purchase of input or the capital good.
3) Rule 4(5)(a) of CCR, 2004 prescribes that
in case inputs sent to job worker are not received back within 180 days, the
manufacturer or service provider is required to pay an amount equal to credit
taken on such inputs in the first instance. However, when the inputs are
subsequently received back from job worker, the amount so paid can be
re-credited in the cenvat credit account even though the goods are received
back from the job-worker after expiry of six months from the date of original
invoice.
Hope you find the above
information relevant and useful in your daily practice.
(The author is a CA in practice at Delhi and
can be contacted at: E-mail: capratikanand@gmail.com, Mobile: +91-9953199493)
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