CENVAT ADMISSIBILITY

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This query is : Resolved

shweta (Querist)

30 November 2010 A pvt ltd renders " Consulting Engineering Services" & accordingly registered under the same category for service tax payment.

This company also exports services outside India for which it receives money in convertible foreign exchange.

It maintains one set of books of accounts for both taxable & export services.Also it is availing total cenvat on input services.

Question:
Does the company need to reverse the cenvat credit in proportion of export sales to total sales & avail only balance cenvat credit for payment of service tax on taxable services ?
Or is it allowed to avail total cenvat without reversing such cenvat on exports ??

Thanks

Rajesh Kumar

Rajesh Kumar (Expert)

01 December 2010 Under Rule 6 of Cenvat Credit Rules, if common inputs/input services are used, proportionate reversal is required.
Under Rule 6(6) certain situations are mentioned where such reversal is not required. Export of services are not falling under Rule 6(6), and hence reversal is required.

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shweta

shweta (Querist)

02 December 2010 Sir , can I get the text of Rule 6 (6) ?

Thanking You in advance!!!!!

CA.Hanumantha Reddy

CA.Hanumantha Reddy (Expert)

03 December 2010 You need not to reverse any input CENVAT credit so long as the exports are taxable service. you can claim entire input credit against domestic services. the Rule 6 of CENVAT credit Rule, 2004 would not applicable in this case.

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