Rule 6 in a fix – Board has already fixed
In , it was pointed out that in respect of the 17 services mentioned under Rule 6(5), though full credit is allowed, a specific inclusion of sub-rule 3A in the non- obstante clause of Rule 6(5) will make things clearer. Before raising this issue, we had our own doubts and held it for a couple of days, but decided to raise it and start a discussion. As expected, many Netizens responded that full credit allowed under Rule 6(5) is not disturbed by non-mentioning of sub-rule 3A in Rule 6(5). An alert netizen has also drawn attention to the CBEC circular No 868/6/2008- CX., Dated: May 9, 2008 wherein it was clarified that the credit attributable to services mentioned in sub-rule (5), shall not be taken into account for determination of amount under rule 6(3A). While we thank the Netizens for sharing their views and since a beneficial clarification has already been issued, there is nothing more to add on this issue.
A Netizen sent in this,
“On the Rule 6 issue, agreed that there is a Board Circular clarifying that credits as per Rule 6 (5) is not includible for computation under Rule 6 (3A). Based on this Circular the field formations will keep quiet. But that tranquillity will last only till the CERA raises an objection on this clarification itself.
Circulars are supposed to clarify doubts, not for bridging the gaps/loopholes in the Rules. It is safer if Rule 6 (5) is amended for good. Therefore, a word of caution must be sounded to the assessees that a favourable Circular from Board is only favourable till the CERA steps in.”
Interestingly, sometimes the rules do not legally convey what we generally understand them to mean logically, and today we are carrying an important order relating to rules and sub-rules in Export of Services Rules, 2005. These rules contained a Rule 3 with sub-rule (1) and (2). The condition of realisation of foreign exchange was mentioned in sub-rule (2) and the CESTAT held that this condition is not applicable to sub-rule (1) as there was no mention of sub-rule (1) in sub-rule (2).
See ST se GST Tak