Simplified rules notified for allowing CENVAT credit

By Our Special Correspondent

NEW DELHI, APRIL 3. The Finance Ministry has notified a new set of simplified rules for allowing Central Value Added Tax (CENVAT) credit.

These have been brought into operation from April 1. The procedural requirements in relation to CENVAT have been minimised and several provisions like filing of declarations prior to availing credit have been dispensed with.

The ad valorem duty has been re-introduced in the case of induction furnaces and re-rolling units which were brought under a capacity-based system of duty payment in 1997. The Government has issued instructions to ensure smooth transition to the ad valorem based levy. Goods manufactured by these units prior to April 1, 2000, would not be subjected to ad valorem duty. Similarly, these duties would be allowed to avail of CENVAT credit in respect of such inputs lying in stocks as are supported by duty-paying documents. Facility of deemed credit has also been allowed for the period from April 1, 2000 to April 30, 2000 to the users of goods manufactured by these units before March 31, 2000.

Certain changes have also been announced with respect to the capacity-based scheme of duty assessment as applicable to independent textile processors. The pre-budget position allowing abatement in respect of closed and sealed stenters has been restored with effect from April 1, 2000. However, such abatement will be permissible only on closure on the stenter for a period not less than 15 days. The abatement will henceforth be sanctioned by the Joint Commissioner of Central Excise instead of the Commissioner. It has also been decided to delegate the power with regard to determination of the annual capacity of production of the factory of the independent processor to the Deputy Commissioner of Central Excise/Assistant Commissioner of Central Excise, with effect from April 1, 2000.

The deemed credit of Rs.18 per kg allowed in respect of texturised yarn (including draw twisted and draw wound yarn) of polyesters has also been extended to manufacturers of woven pile fabrics falling under heading No. 58.01.

CENVAT credit will not be available to the independent texturisers only in respect of the inputs used in the manufacture of texturised yarn (including draw-twisted and draw- wound yarn) of heading No. 54.02. However, where an independent texturiser is also involved in the manufacture of goods other than texturised yarn (for example, fabrics) on which normal excise duty is discharged, the CENVAT credit shall be allowed in respect of the inputs used by such independent texturiser for the manufacture of such other goods.

The Government had earlier exempted watches and clocks of retail price not exceeding Rs. 500 from payment of excise duty. The exemption will now also be available in respect of the parts and components of such watches and clocks.

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Section  : Business
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