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Exclusions to input service for cenvat credit

CA in service & CS. dipmaj@

Rule 2(l) defines input service.There are 3 exclusions to the definition.One of the 3 reads

"services provided by way of renting of motor vehicle in so far as they relate to a motor vehicle which is not a capital good"

can anyone kindly discuss when this exclusion will not be in operation ie who are entitled to avail cenvat credit on input tax on renting of motor vehicle.

If my motor vehicle is a fixed asset in my books then i will get credit. That means if I purchase motor vehicle, I get cenvat credit on excise duty paid on purchase of motor vehicle.


Chartered Accountant

In respect of renting of motor vehicles, it qualifes as input service in the hands of the service receiver, only If the motor vehicle that has been hired is capital goods in the hands of the service provider .



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