Excise Education cess and SHEC can be used for payment of service tax

Central excise department issued a notification no.22/2015 dated 29 October 2015 amending CENVAT credit rules. Now Education cess and Secondary and Higher Education Cess paid on inputs or capital goods can be used for payment of service tax.

In exercise of the powers conferred by section 37 of the Central Excise Act, 1944 (1 of 1944) and section 94 of the Finance Act, 1994 (32 of 1994), the Central Government hereby makes the following rules further to amend the CENVAT Credit Rules, 2004, namely:–

1. (1) These rules may be called the CENVAT Credit (Fifth Amendment) Rules, 2015.

(2) They shall come into force on the date of their publication in the Official Gazette.

2. In the CENVAT Credit Rules, 2004 (hereinafter referred to as the said rules), in rule 3, in sub-rule
(7), in clause (b), after the fifth proviso, the following proviso shall be inserted, namely:—

 “Provided also that the credit of Education Cess and Secondary and Higher Education Cess paid on
inputs or capital goods received in the premises of the provider of output service on or after the 1st day of June, 2015 can be utilized for payment of service tax on any output service :

Provided also that the credit of balance fifty per cent. Education Cess and Secondary and Higher
Education Cess paid on capital goods received in the premises of the provider of output service in the
financial year 2014-15 can be utilized for payment of service tax on any output service: 

Provided also that the credit of Education Cess and Secondary and Higher Education Cess paid on
input service in respect of which the invoice, bill, challan or Service Tax Certificate for Transportation of Goods by Rail (referred to in rule 9), as the case may be, is received by the provider of output service on or after the 1st day of June, 2015 can be utilized for payment of service tax on any output service.”.

[F. No. 334/5/2015-TRU]
ANURAG SEHGAL, Under Secy.
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