Cenvat credit on inputs

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MIHIR GANDHI (Querist)

20 January 2009 I am providing the service of repair and maintenaance to my cleint. The material used at the premises of the cleint are billed directly to the client but are consigned to me. Can I can take credit of the cenvat of the said inputs used by me for providing the taxable services. the billing of mine will include the cost of material issued to me for using in the said contract.

Kindly guide me for the said cenvat credit backed by legal pronounment or rules of the cenvat

VINOD KUMAR GUPTA

VINOD KUMAR GUPTA (Expert)

21 January 2009 Billing in the name of service receiver and you are service providers how you can take cenvat credit.when the bill in your name then you can take cenvat credit.

CA Amarpal

CA Amarpal (Expert)

24 January 2009 Dear Mihir,

As per the given facts, the question will be solved step by step:-

1. Whether your bill shall include the material amount or not?

-- As per Rule 5 of "Service Tax (Determination of value) Rules, 2006, while using the material billed to client, you are working as an agent of the client & fulfulling other conditions prescribed under sub rule 2 of rule 5 above, then the amount of meterial cost shall not be included in your bill. Otherwise, material cost shall be included in your bill amount.
(Refer above rules)

2. If your bill includes the cost of material used,(as per the above rules) then you will be entitled to take credit of duty or tax paid on such inputs.

3. if your bill does not include the material cost, then you will not be entitled to take credit of duty or tax paid on inputs.

With best wishes
amarpal@icai.org

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