As a step to incorporate and to affix a rate structure for exempted goods and services in Goods & Service Tax regime, the CENVAT Credit Rules,2004 has been amended, vide Notification No. 14/2015-Central Excise (N.T.) dated 19.05.2015, in the following manner :
a. date of effect shall be 1st June 2015
b. if a manufacturer or service provider is opting not to maintain separate records for the exempted goods and services then under the amended sub-rule (3) of Rule 6 CENVAT Credit Rules, 2004, such exempted goods and services shall attract seven per cent.(7%) of value of the exempted goods & services,respectively .
c. upto 31st May 2015,the exempted goods and services shall attract six percent (6%) only against the aforesaid clearences .
It is pertinent to note that upto 31.03.2012, the manufacturer of goods were required to pay an amount equal to five per cent. of value of the exempted goods and the provider of output service were to pay an amount equal to six percent. of value of the exempted services;
Whereas, w.e.f 01.04.2012 it was changed to 6% flat for both exempted goods and services .
Rate Structure For GST Regime
The present change of amount payable to 7% is a hint of one of the rate structure in the much awaited Goods & Service Tax (GST) regime .
Since, different rate structures will be there for various goods and services , I strongly feel that in GST regime, like what has been prevailing in different countries with GST , we can see 7% to 8% to be an amount payable on exempted goods and services using common cenvatable inputs and services .
by Anand Mishra, Founder Advocate, AMLEGALS
( The author is a leading indirect tax advocate handling cases in CESTAT & High Courts of India. He can be contacted on email@example.com and for more please refer www.amlegals.com .)