To simplify the provisions related to availment of CENVAT Credit in respect of service tax paid on acquiring right to use of natural resources Central Government has made changes in Rule 4(7) of CENVAT Credit Rules, 2004 vide Notification No. 24/2016-CE (N.T), dated 13th April, 2016. In addition, change has been made in Rule 6 of CENVAT Credit Rules, 2004.

1. Generally, CENVAT credit cannot be availed after the one year from the date of invoice. Now, this condition will not apply for avaliment of CENVAT Credit of service tax paid on services provided by way of right to use of any natural resources.
2. Earlier, CENVAT Credit of service tax paid w.r.t. service provided by way of assignment of right to use of any natural resources (except annual or monthly charges) was required to be spread over the period for which rights has been assigned. Now, CENVAT Credit of Service Tax paid on the one-time charges payable in full up front or in instalments, for the service of the assignment of the right to use any natural resource is required to be spread over a period of three years. For instance, A Ltd. receives input service invoice from B Ltd. for right to use natural resource for 4 years of amounting Rs. 1,00,00,000/- with service tax is of Rs. 14,00,000/-. CENVAT allowed to A Ltd at time of Purchase:- As per New Provision = 4,66,666./- for 3 year (FY 2016-17 to 2018-19) As per Old Provision   = 3,50,000./- for 4 year (FY 2016-17 to 2019-20)
3. Explanation 3 in Rule 6(3)(1) has been amended to treat all activities, which is not a serviceas defined in Section 65B(44) of the Finance Act, 1994, as exempted service only when such activity has used inputs or input services. Earlier, condition regarding use of inputs or input services was not prevalent.