Requirement of reversal of credit under rule 6(3) Cenvat Credit Rules 2004
F. No. 137/3112013-Service Tax
Government of India
Ministry of Finance
Department of Revenue
Central Board of Indirect Taxes and Customs
Service Tax Wing
***
New Delhi, dated 5th July, 2019
All Principal Chief /Chief Commissioners of GST and Central Excise
All Principal Directors General/Directors General/ Chief Commissioner AR CESTAT
All Principal Commissioners/Commissioners ofGST and Central Excise /AR CESTAT
All Principal Additional Directors General/Additional Directors General
Madam/Sir,
I am directed to draw your attention to the legal provisions regarding reversal of Cenvat credit in the case of services and to analyse some issues which have arisen in this context.
Answer: On a plain and strict interpretation of the provisions, all services mentioned in notification 26/2012-Service Tax dated 20-6-2012 do not, ipso facto, become “exempted services”. They will become so only if they satisfy the twin conditions specified in section 2(e) of the Cenvat Credit Rules, 2004 i.e there is a restriction on both inputs and input services.
Answer: On a plain and strict interpretation of the wording of the relevant provisions , other than the restrictions in rule 2C of the Service Tax (Determination of Value) Rules 2006, there is no need for any further reversal of credit under rule 6(3) of the Cenvat Credit Rules 2004.
Yours faithfully
(Pallabika Dutta)
Joint Commissioner & Officer on Special Duty
Service Tax Wing
Email: commr.st-cbec@nic.in
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