Amended provisions as per the Finance Bill, 2016 in respect of availing CENVAT Credit for provider of exempted as well as non-exempted services
Changes in the scheme of availing CENVAT Credit for provider of exempted as well as non-exempted services (Applicable w. e. f. 01.04.2016):
Rule 6 of the CENVAT Credit Rule, 2004 provides the detailed mechanism for availing/reversing the CENVAT Credit in respect of input and input services for provider of exempted or nonexempted services. Notification No. 13/2016-Central Excise (N.T.) dated 01/03/2016 is carrying out certain changes in the scheme provided under said rule. The important changes are as under
(i) An activity, which is not a ‘service’ as defined in section 65B (44) of Finance Act, 1994, shall be considered as “Exempted Services” for the purpose of rule 6 of CENVAT Credit Rule, 2004;
(ii) Entire CENVAT Credit shall be reversed in respect of input or input services used exclusively for providing exempted services;
(iii) CENVAT Credit shall be available without any reversal in respect of input and input services used exclusively for providing non-exempted services;
(iv) Proportionate reversal shall be applied only on common inputs or common input services used for exempted as well as non-exempted services;
(v) This new scheme is applicable for the Financial Year 2016- 17 onwards.
Financial year 2015-16 shall be governed by the scheme as applicable prior to this amendment.