Cenvat Credit of Service tax on right to use any natural resource

By | April 14, 2016


NOTIFICATION NO.24/2016-C.E.(N.T.), DATED 13-4-2016

In exercise of the powers conferred by section 37 of the Central Excise Act,1944 (1 of 1944) and section 94 of the Finance Act, 1994 (32 of 1994), the Central Government hereby makes the following rules further to amend the CENVAT Credit Rules, 2004, namely:—

1. (1) These rules may be called the CENVAT Credit (Fifth Amendment) Rules, 2016.

(2) They shall come into force on the date of their publication in the Official Gazette.

2. In the CENVAT Credit Rules, 2004 (hereinafter referred to as the said rules), in rule 4, in sub-rule (7),—

(i) in the fifth proviso, after the words “documents specified in sub-rule (1) of rule 9”, the words “except in case of services provided by Government, local authority or any other person, by way of assignment of right to use any natural resource” shall be inserted;
(ii) for the sixth, seventh and eighth proviso, the following provisos shall be substituted, namely :—
Provided also that CENVAT Credit of Service Tax paid in a financial year, on the one-time charges payable in full upfront or in instalments, for the service of assignment of the right to use any natural resource by the Government, local authority or any other person, shall be spread evenly over a period of three years:
Provided also that where the manufacturer of goods or provider of output service, as the case may be, further assigns such right assigned to him by the Government or any other person, in any financial year, to another person against consideration, such amount of balance CENVAT credit as does not exceed the service tax payable on the consideration charged by him for such further assignment, shall be allowed in the same financial year.”.

3. In the said rules, in rule 6, in sub-rule (1), in Explanation 3, after the figures “1994”, the words “provided that such activity has used inputs or input services” shall be inserted.

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