03 October 2008
One of my clients are the service providers of Taxable and Exempt Services and seperate books of accounts are not maintained. To claim Cenvat on account of Input Services we have to follow sub-rule 6(3) and 6(3A). Some of the Input Services are common to both type of services while some are exclusively utilised for taxable or exempt services.
How the cenvat should be claimed in viw of the facts and the legal position?
How the option out of the two alternatives given in sub-rule 6(3) is exercisable?
How the Cenvat Register is to be maintained? Whether it should be Service wise?
Whether any intimation is to be given to the department for the option to be exercised?
All these category of sevices are exeception. Rule 6(5) of Cenvat Credit Rules provides that in case of specified services, full Cenvat credit of input service is available even if these services are partly used in manufacture of exempted final product/output services.
AnwserNo.2 (a) Maintain separate inventory and accounts of receipt and use of inputs and input services used for exempted goods/exempted output services – Rule 6(2) of Cenvat Credit Rules.
(b) Pay amount equal to 10% of value of exempted goods (if he is ‘manufacturer) and/or 8% of value of exempted services (if he is service provider) if he does not maintain separate inventory and records – Rule 6(3)(i) w.e.f. 1-4-2008.
(c) Pay an ‘amount’ equal to proportionate Cenvat credit attributable to exempted final product/ exempted output services – Rule 6(3)(ii) w.e.f. 1-4-2008.
Anwser No. Such option has to be exercised in respect of all exempted goods manufactured and all exempted output services provided. The option once exercised shall not be changed in remaining part of financial year – Explanation I to Rule 6(3) inserted w.e.f. 1-4-2008 - reiterated in para 2 of CBE&C Circular No. 868/6/2008-CX dated 9-5-2008. and whatever option is adopted is required to intimate to the department
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