The Central Board of Excise and
Customs (CBEC) on Tuesday tightened the rules to enable field officers to impose restrictions on businesses in the services sector to utilise the Cenvat credit facility
if they are found to have
misused it.
The Cenvat Credit (Seventh Amendment) Rules, 2014 issued by the Board has extended the scope of provisions meant to prevent duty credit misuse to cover ?providers of taxable service? as well.
The existing provisions covered only manufacturers and first and second stage dealers or exporters. Since services account for about 60% of the country’s GDP and the Cenvat credit is available for both excise duty as well as service tax paid on the inputs availed by a business, the Board decided to extend the penal provisions to the services sector as well.
The rules allow a field officer to impose restrictions
on a business including
on utilization of Cenvat
credit, suspension of registration in case of a dealer and withdrawal of certain other facilities.
The move is part of the revenue department’s attempts to prevent tax evasion. Finance minister Arun Jaitley had recently said that revenue targets in the case of indirect taxes for the current financial year 2014-15 are challenging but are very much achievable.
