Recently on 1st April, 2016, Central Government by virtue of Notification no. 23/2016-CE (NT), has amended clause (i) of sub rule (3) of Rule 6 of the CCR Rule, 2004 vide CENVAT Credit (Fourth Amendment) Rules, 2016.
As a result of said amendment, option to reverse CENVAT credit of 6% of exempted goods and of 7% value of exempted services has been restricted to a maximum of the sum total of opening balance of the credit of input and input services available at the beginning of the period to which the payment relates and the credit of input and input services taken during that period.
However, earlier vide Finance Act, 2016; lawmakers had restricted the said reversal limit vide notification no. 13/2016-CE (NT) dt. 1st March, 2016, subject to a maximum of the total credit available in the account of the assessee at the end of the period to which the payment relates.
Impact of the said amendment could be understood as under:-
Illustration
|
Say, Opening balance of CENVAT |
100 |
|
Add:- Availed during the month |
100 |
|
Less:- Utilised |
80 |
|
Closing balance of CENVAT |
120 |
Hence, as could be seen from the supra illustration that earlier maximum reversal was restricted to Rs. 120/- i.e. closing balance for the period, however, now said limit has been enhanced to Rs. 200/-, i.e. Opening balance along with the amount of CENVAT availed during the period.
