Cenvat credit to be carried forward under GST: Finance Ministry

The unavailed Cenvat credit would be carried forward for use of any natural resource under the Goods and Services Tax (GST) regime, the Finance Ministry said on Wednesday.

Cenvat credit rules have been amended so as to provide that Cenvat credit which remains unavailed in respect of assignment of right to use any natural resource under GST, the ministry said here in a statement.

"The amendment would enable service recipients to carry forward such unavailed credit of service tax under the GST regime," it said.

"As a result telecom service providers, who have been allotted spectrum in auction conducted in 2016 and have already availed 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 roll-out on July 1," it said.

Cenvat credit rules have been amended on June 12 so as to provide that Cenvat credit in respect of services which remains unavailed when Central GST comes into effect, it said.

Cenvat Credit Rules, 2004 provide that credit of service tax paid in a financial year, on the 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.

--IANS

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