Since 10th September 2004, the manufacturers have become eligible to credit of tax paid on ‘input services’.
The term ‘input service’ has been defined in the ‘rules’. Broadly speaking all the services used for
- manufacture of the goods
- clearance of the goods
- the business of manufacture
Following services are included in the definition (i.e. credit can be availed on the following input services also):
i. Services used in relation to setting up, modernization, renovation or repairs of
§ Office (related to the factory)
ii. Tax paid on Advertisement, Sales promotion, Market research,
iii. Storage upto place of removal,
iv. Procurement of inputs (taxable under business auxiliary services)
v. Activities relating to business such as accounting, auditing, financing, recruitment, quality control, coaching & training, computer networking, credit rating, share registry, and
vi. Security, inward transportation of inputs/ capital goods and outward transportation upto the place of removal.