Cenvat credit on capital goods can be claimed by the hotel

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Parampreet Kaur (Querist)
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04 October 2016 One of our client (Hotel industry) has excise duty receivable of Rs. 10 lakhs. Operations started in September. I want to know that Cenvat credit on capital goods can be claimed by the resort? Since resort is giving services of Renting of hotels, inns, guest houses, clubs, campsites or other commercial places meant for residential or lodging purposes and there is abatement of 40%..
My query is if we can take Cenvat credit this year and no abatement...and in upcoming years when CC utilized shall we eligible to take the abatement?

CA Ashish Garg

CA Ashish Garg (Expert)
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05 October 2016 Yes, in my view if you are discharging your service tax liability at full rate without claiming the benefit of any abatement, then in such a case, you can avail the benefit of CENVAT Credit on capital goods.

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Parampreet Kaur

Parampreet Kaur (Querist)
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06 October 2016 Thanks for your reply. Please tell whether the assessee can take the Abatement in next years after taking the Cenvat Credit on capital goods in very first year?

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