I. Rationalization of Abatements – w.e.f. 1st April 2016 in Notification No.26/2012-ST:
1.0 Passenger/Goods Transportation by Rail – credit on input services extended:
♦ Earlier, the notification provided for abatement subject to not taking cenvat credit on inputs, capital goods and input services.
♦ The restriction regarding availment of credit on input services has been removed.
♦ Given the fact that such abatement is mainly given to take care of the goods portion there was no justification to restrict the credit on input services as the output service suffered tax.
♦ This amendment enables taking of credit on input services eventhough abatement is availed.
2.0 Transport of Goods in Containers by Rail – credit on input services extended:
♦ Abatement of 70% was available subject to non-availment of credit on inputs, input services and capital goods.
♦ Now the abatement is restricted to 60% with cenvat credit benefit on input services.