Shifting of factory – What about Input Service Credit?
On Tuesday - , we had carried a question sent by a netizen enquiring what he is supposed to do about the finished goods lying in stock when he is shifting his factory.
Immediately, we received another mail pointing out that Rule 10 of the CENVAT Credit Rules, 2004 concerning transfer of CENVAT Credit has chosen to maintain a stoic silence about the fate of the CENVAT Credit on Input Services availed by a manufacturer or an output service provider and which could be lying unutilized in his CENVAT Credit account.
What would be the fate of this CENVAT Credit quantum if the manufacturer or an output service provider shifts or transfers his business? Should it be considered as lapsed or should the assessee reverse the proportionate quantum? Or, on an optimistic note, should this credit on input services be allowed to be carried forward?
Since Rule 10 CCR, 2004 does not provide any answer it is expected that the now proactive Board looks into the issue and does the needful before any damage is done.