Existing `reasonable steps' not practical
New Delhi, May 27
Corporate India may have some good news coming its way on the Cenvat credit front. The Finance Ministry plans to redraft an existing rule on cenvat credit to ensure that conditions imposed for availing such credit by companies are practical and easy to comply with.
The draft proposal casts specific legal responsibility on a purchaser of goods/services for which he has taken Cenvat credit to ensure that critical details regarding payment of tax, description of goods/services and factory or input service provider particulars are available on the document on which credit is taken.
If the proposal sees the light of day, corporate India would not have to comply with the existing `reasonable steps' that are required for availing Cenvat credit.
Draft circular highlights
These `reasonable steps' are now specified in the Cenvat Credit Rules 2004 under rule 9(3). However, representations have been made that some of these steps are not practical. This has prompted the Finance Ministry to come up with a draft circular and invite trade and industry comments on the same.
The draft circular highlights a suggestion before the Central Board of Excise and Customs (CBEC) for making the conditions imposed on purchaser less onerous.
The suggestion relates to amending rule 9(2) to achieve the objective of easier compliance, thereby leading to withdrawal of `reasonable steps' specified in rule 9(3).
At present, rule 9(2) states that the revenue department cannot deny credit to assesses if certain details such as particulars about payment of duty or service tax, description of the goods or services, assessable value and name and address of the factory are available on the document on which credit is availed.Related Stories:
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