CENVAT Credit Rules amended to remove infirmities as suggested in Budget Run up of TIOL

By TIOL News Service

NEW DELHI, JULY 06, 2009: AS suggested in our column Budget Run Up, CENVAT Credit rules 2004 have been amended to remove certain inconstancies vide Notification No 16/2009 CE(NT) dated 7.7.2009.

In Rule 6(3), clause (i), has been substituted to decrease the amount payable from 10% of the value of the exempted goods to 5% and from 8% payable on the value of exempted services to 6%. The new clause after the amendment now reads:

(i) the manufacturer of goods shall pay an amount equal to five per cent. of value of the exempted goods and the provider of output service shall pay an amount equal to six per cent. of value of the exempted services; or”.

Sub-rule 5(B) of Rule 3 has also been amended to include the service providers also in the ambit of the rule along with the manufacturers. This rule which provides for payment of credit on inputs and capital goods written off in the books of accounts and taking it back when the same are subsequently put to use, prior to the amendment this rule did not contain service provider which now stands corrected.

In Rule 2 (k), the definition of input has been amended to exclude Cement, angles, channels, Centrally Twisted Deform bar(CTD) or Thermo Mechanically Treated bar(TMT) and other items used for construction of factory shed, building or laying of foundation or making of structures for support of capital goods”.