To simplify the provisions related to
availment of CENVAT Credit in respect of service tax paid on acquiring right to
use of natural resources Central Government has made changes in Rule 4(7) of
CENVAT Credit Rules, 2004 vide Notification No. 24/2016-CE (N.T), dated 13th
April, 2016. In addition, change has been made in Rule 6 of CENVAT Credit
Rules, 2004.

1.  Generally, CENVAT
credit cannot be availed after the one year from the date of invoice. Now, this
condition will not apply for availment of CENVAT Credit of service tax paid on
services provided by way of right to use of any natural resources.

2. Earlier, CENVAT
Credit of service tax paid w.r.t. service provided by way of assignment of
right to use of any natural resources (except annual or monthly charges) was
required to be spread over the period for which rights has been assigned. Now,
CENVAT Credit of Service Tax paid on the one-time charges payable in full up
front or in installments, for the service of the assignment of the right to use
any natural resource is required to be spread over a period of three
years. 

For instance, A Ltd.
receives input service invoice from B Ltd. for right to use natural resource
for 4 years of amounting Rs. 1,00,00,000/- with service tax is of Rs.
14,00,000/-. CENVAT allowed to A Ltd at time of Purchase:-

As per New Provision = 4,66,666./- for 3 year (FY 2016-17 to
2018-19)

As per Old Provision   = 3,50,000./- for 4 year (FY 2016-17
to 2019-20)  

3.  Explanation 3 in Rule
6(3)(1) has been amended to treat all activities, which is not a service as
defined in Section 65B(44) of the Finance Act, 1994, as exempted service only
when such activity has used inputs or input services. Earlier, condition
regarding use of inputs or input services was not prevalent.