In a major relief for telecom firms, the Finance Ministry has allowed them to carry forward of unavailed credit for Cenvat to the goods and services tax (GST) regime.
“Cenvat credit in respect of such services which remains unavailed on the day immediately preceding the ‘appointed day’ may be availed of in full on that very day,” said the Finance Ministry on Wednesday.
The Central Board of Excise and Customs has already made the required amendments to the Cenvat Credit Rules.
“The amendment would enable service recipients to carry forward such unavailed credit of service tax under the GST regime,” said the Finance Ministry.
This would mean that telecom service providers who were allotted Spectrum in the auctions conducted in 2016 and have already availed one third of the credit for service tax in 2016-17 would be able to take the remaining credit in the GST regime that rolls-out from July 1.
Under the rules, credit of service tax paid in a financial year, on the one time charges payable in full upfront or in instalments, for the service of assignment of the right to use any natural resource by the Government, local authority or any other person, shall be spread evenly over a period of three years.