Service Tax

This query is : Resolved

Vinit Panwar (Querist)
Follow

20 April 2009 Hello Sir/Mam,

How much credit we can taken if we provide two services first is Taxable and Second is exempt Pls explain with rule and notification its very urgent for me

Dayal

Dayal (Expert)
Follow

20 April 2009 Circular No. 868/6/2008-CX

F.No.267/43/2008-CX.8 Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise & Customs
***
New Delhi dated the May 9, 2008

Subject: Amendments in the CENVAT Credit Rules, 2004 w.e.f. 01.04.08- regarding.

In the budget 2008-09, certain amendments have been carried out in the CENVAT Credit Rules, 2004. Rule 6 of CENVAT Credit Rules, 2004 pertains to an assessee who manufactures dutiable and exempted goods and provision of taxable and exempted services. As a general principle, CENVAT credit is not allowed on input or input service used for the manufacture of exempted goods or provision of exempted services [refer Rule 6(1)]. Exception to Rule 6(1) is contained in rules 6(3), 6(5) and 6(6).
Rule 6(2) : Provides facility to an assessee to maintain separate Cenvat credit account for dutiable and exempted goods or services (hereinafter referred to as outputs) and take credit only on inputs and input services meant for use in dutiable outputs.
Rule 6(3): Pertains to an assessee opting not to maintain separate Cenvat credit accounts for dutiable and exempted outputs. Such assessee has to opt for one of the following two options:

(i) Pay an amount equal to 10% of the value of the exempted goods or 8% of the value of the exempted services. Exempted service includes non-taxable service also.
OR
(ii) Pay an amount equivalent to the CENVAT credit attributable to inputs and input services used in or in relation to manufacture of exempted goods or for provision of exempted services. Rule 6(3A) prescribes the conditions and procedure to determine the amount of CENVAT credit attributable to exempted outputs.

More details can be checked from the circular