Cenvat credit on input service

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

27 March 2012 WE ARE THE MANUFACTURER OF READYMADE GARMENTS. WE PAY EXCISE DUTY ON ABEATMENT SYSTEM. CAN WE TAKE CENVAT CREDIT ON INPUT SERVICE ? LIKE, RENT PAID EXCEPT FACTORY PREMISES ?

RAMESH KUMAR VERMA

RAMESH KUMAR VERMA (Expert)

28 March 2012 Rule 3 (1) of CENVAT Credit Rules, 2004 provides that a manufacturer or producer of final products or a provider of taxable service shall be allowed to take credit of-

- the service tax leviable under Sec. 66 of the Finance Act, 1994;

- the Education Cess on taxable services leviable under Sec. 91 read with Sec. 95 of the Finance Act, 2004 (23 of 2004); and

- the Secondary and Higher Education Cess on taxable services leviable under Section 136 read with Section 140 of the Finance Act, 2007 (22 of 2007) paid on any input service received by the manufacturer of final product or by the provider of output services on or after the 10th day of September 2004. Rule 3(4) that the CENVAT credit may be utilized for payment excise duty or service tax.

Rule 4 prescribes conditions for allowing CENVAT credit. This rule in respect of availing service tax paid on input services imposed conditions vide sub-section (7). According to this sub section the CENVAT credit in respect of input service shall be allowed, on or after the day on which payment is made on the value of input service and the service tax paid or payable as is indicated in invoice, bill or, as the case may be, challan referred to in Rule 9. But this condition is not applicable in respect of credit of duties paid on inputs and capital goods.

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