CENVAT Credit Ends Where Securities Investment Begins

| Last updated: 21 July 2026

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A recent tribunal decision clarifies that while investing in securities using one's own funds isn't considered a taxable service, CENVAT credit on common input services used for both taxable and non-taxable activities cannot be fully retained. The principle is that CENVAT credit is intended for taxable output and cannot extend to activities outside the tax-credit chain. This means businesses must carefully track and potentially reverse credit for services supporting both taxable operations and investment activities.

A Credit Dispute Hidden Inside a Securities Investment The decision of the CESTAT, New Delhi, in M/s IFCI Limited v. Commissioner of CGST, Delhi East, 2026-VIL-1256-CESTAT-DEL-ST, Service Tax Appeal No.51342 of 2018, Final Order No.51185/2026, dated 15.07.2026, raises an important question in the Service Tax and CENVAT credit regime. The issue was not merely whether investment in securities is a service. The deeper question was whether full CENVAT credit can be retained on common input servi

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About the Author

Raj Jaggi

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CA. Raj Jaggi is a Chartered Accountant based in New Delhi, primarily practising in the field of Goods and Services Tax (GST) consultancy, litigation support, and advisory services. After being associated with the leading indirect tax firm A.K. Batra and Associates for nearly 19 years, from June 2007 to March 2026, he ... Read more

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