Cenvat credit - on what basis?
This query is : Resolved
Deepika Kochhar
(Querist)
27 April 2012
Please tell me that for availing cenvat credit of input service, should that input service be linked to the output service? In other words, whether one to one relationship between input and output service is to be established before availing cenvat credit?
Ashish Bansal
(Expert)
27 April 2012
For claiming CENVAT credit, input service is required to be used in or in relation to output service.
For eg. if a practicing CA is providing services related to consultancy, audit etc then he can claim input credit of service tax paid on telephone bills.
For eg. if a practicing CA is providing services related to consultancy, audit etc then he can claim input credit of service tax paid on telephone bills.
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CA Nikhil Jhanwar
(Expert)
27 April 2012
There are variuos case laws supporting that there is no one to one correlation is required between input service ans outpur service.......
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Deepika Kochhar
(Querist)
28 April 2012
Ok fine.. Now consider a case.. One of my clients is providing maintenance & repair service and on the other hand, he is also dealing in the goods of which he is doing repairs.. For trading purpose, he receives the goods via transport on which he is paying service tax on reverse charge basis.. Now he is not eligible to claim cenvat credit of such service tax paid.. M I right?
CA Nikhil Jhanwar
(Expert)
28 April 2012
Yes If input services are used exclusively for exempted service including trading, then no Cenvat Credit is allowed in view of Rule 6 of CCR, 2004.
You are absolutely right
You are absolutely right
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Deepika Kochhar
(Querist)
28 April 2012
Thank You so much.. Now I have one more query.. There's a person whose cenvat credit is much more than the service tax liability on him.. He can never fully utilize that credit.. So, is there any provision through which he can claim refund???
CA Nikhil Jhanwar
(Expert)
28 April 2012
No as such there is no provision for refund until and unless either correspondings goods are exported or services are exported
Deepika Kochhar
(Querist)
28 April 2012
Ok fine.. Thanx a ton.. :)
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