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Cenvat availability to a restaurant

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smit (Querist)
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28 February 2016 Dear professionals As Restaurant service is liable for service tax @ 40% of total bill. Whether a restaurant can avail 'Full' cenvat credit on input service and capital goods or 'partly'. Is there any specific criteria for it.? Thanks in advance

Suresh Ramaswamy

Suresh Ramaswamy (Expert)
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28 February 2016 Notification No: 26 / 2012 - S.T dated 20th June 2012 and amended from time to time, the last one being by Notification No: 8 / 2015 - S.T. dated 1st March 2015 has clearly laid down the following condition to avail of abatement of 60% in the taxable service of providing food and drinks in an A/C Restaurant " CENVAT credit on any goods classifiable under Chapters 1 to 22 of the Central Excise Tariff Act, 1985 (5 of 1986) used for providing the taxable service, has NOT BEEN TAKEN (emphasis provided) under the provisions of the CENVAT Credit Rules, 2004."

Therefore CENVAT credit cannot be availed off either partly or fully.

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