CBEC clarifies that time limit of six months applicable for CENVAT availment does not apply to re-credit of such CENVAT

This Tax Alert on the recent circular No. 990/14/2014-CX-8 dated 19 November 2014 issued by CBEC clarifying the doubts raised by trade and industry in respect of recently introduced time limit provisions for availment of CENVAT credit.

In the Union Budget 2014-15, Government amended Rule 4(1) and Rule 4(7) of the CENVAT Credit Rules, 2004 (CCR, 2004) thereby inserting provisions relating to time limit for availment of CENVAT credit on documents issued in terms of Rule 9(1) of the Rules. Trade and Business raised doubts on the applicability of the said amendment to the provisions related to re-credit of CENVAT credit. CBEC clarifies in the said circular that such time limit will not be applicable to the re-credit of CENVAT provisions as contained in third proviso to Rule 4(7), Rule 3(5B) and Rule 4(5)(a) of CCR, 2004, as the purpose of amendment is to ensure availment for the first time of CENVAT credit on specified documents in Rule 9(1) within six months of issuance / date of that document.

This is a welcome step on the part of  CBEC as it was much sought after clarification by the industry