cenvat credit

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ashish alagh (Querist)
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09 February 2011 One of our client is in the business of providing offices on rent and is charging service tax.
My query is whether our client can avail cenvat credit paid on telephone expenses(given to employees and managers etc.), if yes please qoute section/notification.

VIPIN KUTUMBALE

VIPIN KUTUMBALE (Expert)
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09 February 2011 Thumb rule of cenvat is there is nexus between output service & input service and there should be value addition because of input service .

Apply this thumb rule in using cenvat benefit and avoid penalty.

Thanks Vipin kutumbale

ashish alagh

ashish alagh (Querist)
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10 February 2011 Mr.vipin please elaborate

VIPIN KUTUMBALE

VIPIN KUTUMBALE (Expert)
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10 February 2011 (p) "output service" means any taxable service, excluding the taxable service referred to in sub-clause (zzp) of clause (105) of section 65 of the Finance Act, provided by the provider of taxable service, to a customer, client, subscriber, policy holder or any other person, as the case may be, and the expressions ‘provider’ and ‘provided’ shall be construed accordingly;

(l) "input service" means any service,-

(i) used by a provider of taxable service for providing an output service; or

(ii) used by the manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and clearance of final products upto the place of removal,
(This clause has been amended vide Notification 10/2008 C.E. (N.T.) - dated 01-03-2008)

and includes services used in relation to setting up, modernization, renovation or repairs of a factory, premises of provider of output service or an office relating to such factory or premises, advertisement or sales promotion, market research, storage upto the place of removal, procurement of inputs, activities relating to business, such as accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating, share registry, and security, inward transportation of inputs or capital goods and outward transportation upto the place of removal;

here service provider has limited scope as compare to manufacturer. the service should be used to provide output service, that means input out put relation is required.. by using input service , output service is provided.

hope this will serve your purpose.

for further details contact me on 09898060811/ vkutumbale@rediffmail.com

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