This Tax Alert on Notification No. 12/2015 dated 30 April 2015 amending the CENVAT Credit Rules, 2004 to provide for the utilization of Education Cess (EC) and Secondary & Higher Education Cess (SHEC) against payment of Excise duty.
Recent Union Budget 2015-16 proposed subsuming of EC and SHEC in Excise duty and Service tax.
The Tax Alert summarizes Notification No. 12/2015 dated 30 April 2015, issued by the Ministry of Finance (Department of Revenue), amending Rule 3 of the CENVAT Credit Rules, 2004 (CCR) in order to align it with the Budget amendment.
The amended Rule 3(7) of the CCR allows the utilization of credit of EC and SHEC paid on inputs/capital goods/input services received by a manufacturer, on or after 1 March 2015, against the payment of Excise duty. It further provides for utilization of balance 50% of EC and SHEC paid in respect of capital goods received in the financial year 2014-15 against payment of Excise duty.
The Notification partially addresses the transition issues with reference to utilization of EC and SHEC against payment of Excise duty.
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