Cenvat Credit of Krishi Kalyan Cess (KKC) Paid on Input Services Available to Service Providers and Utilised for Discharge of Liability of KKC only

[Excise Notification No. 28 (Non Tariff) dated 26^th May 2016]

Seeks to amend Cenvat Credit Rules so as prescribe that Cenvat credit of Krishi Kalyan Cess paid on input services would be available to service providers and could be utilised for discharge of liability of Krishi Kalyan Cess only.

In exercise of the powers conferred by section 37 of the Central Excise Act, 1944 (1 of 1944) and section 94 of the Finance Act, 1994 (32 of 1994), the Central Government hereby makes the following rules further to amend the CENVAT Credit Rules, 2004, namely: –

1. (1) These rules may be called the CENVAT Credit (Seventh Amendment) Rules, 2016.

(2) They shall come into force on 1st of June, 2016.

2. In the CENVAT Credit Rules, 2004, in rule 3,

(a) after sub-rule (1), the following sub-rule shall be inserted, namely :-

“(1a) A provider of output service shall be allowed to take CENVAT credit of the Krishi Kalyan Cess on taxable services leviable under section 161 of the Finance Act, 2016 (28 of 2016);”;

(b) in sub-rule (4), after the ninth proviso, the following proviso shall be inserted, namely,-

“Provided also that the Cenvat credit of any duty specified in sub-rule (1) shall not be utilised for payment of Krishi Kalyan Cess leviable under section 161 of the Finance Act, 2016 (28 of 2016);”;

(c) in sub-rule (7),

(i) after the words, figures and brackets “sub-rule (1)”, the words, figures and brackets “, sub-rule (1a)” shall be inserted;

(ii) after clause (c), the following clause shall be inserted, namely,-

“(d) Cenvat credit in respect of Krishi Kalyan Cess on taxable services leviable under section 161 of the Finance Act, 2016 (28 of 2016) shall be utilised only towards payment of Krishi Kalyan Cess on taxable services leviable under section 161 of the Finance Act, 2016 (28 of 2016)”;

[F.No. B-1/18/2016 - TRU]