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Circular 213/3/2019 -Service Tax
F. No 137/32/2014-Service Tax
Government of India
Ministry of Finance
Department of Revenue
Central Board of Indirect Taxes and Customs
Service Tax Wing
eek
New Delhi, dated 5" July, 2019
All Principal Chief /Chief Commissioners of GST and Central Excise
All Principal Directors General/Directors General/ Chief Commissioner AR CESTAT
All Principal Commissioners/Commissioners of GST and Central Excise /AR CESTAT
All Principal Additional Directors General/Additional Directors General
Madam/Sir,
Subject: Provisions in the Cenvat Credit Rules 2004 regarding reversal of credit
I am directed to draw your attention to the legal provisions regarding reversal of Cenvat
credit in the case of services and to analyse some issues which have arisen in this context.
2.0 Issue: Is reversal under rule 6(3) of the Cenvat Credit Rules 2004 additionally
required for all the services specified in notification 26/2012-Service Tax dated 20-6-2012?
Answer: On a plain and strict interpretation of the provisions, all services mentioned in
notification 26/2012-Service Tax dated 20-6-2012 do not, ipso facto, become “exempted services”.
They will become so only if they satisfy the twin conditions specified in section 2(e) of the Cenvat
Credit Rules, 2004 i.e there is a restriction on both inputs and input services.
3.0 Issue: Is reversal under rule 6(3) of the Cenvat Credit Rules 2004 additionally
required, when providing the “service portion in an activity wherein goods, being food or any
other article of human consumption or any drink (whether or not intoxicating) is supplied in any
manner as part of the activity”. (i.e. section 66E (i) of the Finance Act, 1994) ?
Answer: On a plain and strict interpretation of the wording of the relevant provisions, other than
the restrictions in rule 2C of the Service Tax (Determination of Value) Rules 2006, there is no
need for any further reversal of credit under rule 6(3) of the Cenvat Credit Rules 2004.


Joint Commissioner & Officer on Spegial Duty
Service Wing
Email: commr.st-cbec@nic.in
circulars no 213 3 2019 service tax | iKargos