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service tax input

RAVICHANDER V.M. (Senior Executive-Finance) (69 Points)

17 May 2009

Dear Sir,

Pls.let me know as to how much we can claim input credit on administrative expenses.Is it 20 % or 10%?

Regards

Ravichander

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8 Replies

kaustubh (CA, CS , CFM) (293 Points)
Replied 17 May 2009

ya, u can take credit for expenses like telephone bills n so on

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RAVICHANDER V.M. (Senior Executive-Finance) (69 Points)
Replied 18 May 2009

Noted.Thanks.

Regards

Ravichander

Arun Kumar Singh (GST Advocate) (15188 Points)
Replied 18 May 2009

you can take credit on used services like telephone & Internate. 10%

Satish (CA Final Student) (479 Points)
Replied 19 May 2009

You can take full credit of service tax paid on input services provided you are not rendering any exempted service. If so you need to pay the proportionate service tax credit relating to exempted service. Service tax paid under GTA on freight outward can be claimed only when it can be justified that the service tax on GTA is an input service relating to the output service.

Madhukar N Hiregange (Chartered Accountant) (39034 Points)
Replied 19 May 2009

If exempted services also exist then you require to bifucate your common services and on thos especified in 6(5) 100% credit is available. On balance only proportinate basis.

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CA-ASPIRANT (CA-STUDENT ) (650 Points)
Replied 19 May 2009

Mr Ravi Chander

as per rule 6(5) of cenvat credit rule, 2004.

There are a few administrative expenses which are used for both exempted and taxable services , You may take credit in full. You may not need to proportinate the input service t ax credit.

Input which are completely used for exempted services are not eligible for cenvat credit.

These are as follows

Telephone expenes., Security Expenes, Management consultancy service, Erection services,

Banking & financing services etc.

Satish (CA Final Student) (479 Points)
Replied 19 May 2009

Amritesh talking about the second option under which separate books of accounts are required to be maintained for exempted service & taxable service. But I totally disagree with him treating the Telephone service, security service etc as input used completely for exempted service. e.g. nobody can bifurcate how many calls r relating to exempted service & rest calls for taxable service. So the Cenvat rules provide for proportionate basis when it is not possible to separate the services between exempted & taxable