Cenvat Credit Rules Amended To Enable Carry Forward Of Unavailed Credit Of Service Tax Under GST

The Centre has amended Cenvat Credit Rules 2004, vide notification No. 15/2017-Central Excise (NT) issued on Monday, that would enable service recipients to carry forward unavailed credit of service tax under the GST regime.

According to the notification, Cenvat credit, in respect of such services which remain unavailed of on the day immediately preceding the ‘appointed day’, may be availed of in full on that very day. Appointed day means the day when Central GST comes into effect.

As a result, telecom service providers, who have been allotted spectrum in auction conducted in 2016 and have already availed of one-third credit in respect of service tax paid by them during 2016-17, would be eligible to take the remaining two-thirds credit pertaining to 2016-17 in the GST regime, scheduled to rollout on July 1.

The notification provides that credit of service tax paid in a financial year, on one-time charges payable in full upfront or in installments 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.