Rule 4(7) of the CENVAT Credit Rules amended – Another “we told you so…”
IN our post budget analysis, within a few hours after the notifications were made public, we suggested that Rule 4(7) of the CENVAT Credit rules 2004 needs to be amended in tune with the Point of Taxation Rules, 2011. (Payment of Service Tax on accrual basis on par with Excise – Where is corresponding amendment to Rule 4(7) of CCRs, 2004?). We suggested that “Now that the Rule 6 of Service Tax rules is amended with effect from 1.4.2011 to make the assessee liable for payment of service tax on par with excise, there is no reason to retain this condition in CENVAT Credit Rules. However, such an important amendment is missing in the CENVAT Credit Rules, 2004. Hope corrective action will be taken before 1.4.2011”.
And the good Board did it before 1.4.2011. Rule 4(7) of the CENVAT Credit rules has been amended to allow the CENVAT credit in respect of input service on or after the day on which the invoice, bill or, as the case may be, challan referred to in rule 9 is received subject to certain “provisos” mentioned therein.
Credit on Supplementary Invoices : Rule 9 of the CENVAT Credit Rules has been amended to stipulate a supplementary invoice issued by a service provider as a valid document for taking credit.
NOTIFICATION NO , Dated: March 31, 2011