Cenvat input availability for manufacturing company
This query is : Resolved
17 February 2013
Facts:-
Company D Ltd is leading Manufacturing concern in Food industry whose final product is exempt for excise & service tax.
Company D also received some income by Sales Promotion fund from manufactures in same sector by display their products. On same income, company D charged service tax.
To sell their products Company is doing intense advertisement on which Company paying service tax.
Question:-
1) Is income from sales is taxable under service tax provisions?
2) Can Company take service tax paid over advertisement as CENVAT input & can set off for service tax payable over Sales promotion Income?
3) Company D already registered in service tax, are we required to register as service provider for this service to take this CENVAT??
Company D Ltd is leading Manufacturing concern in Food industry whose final product is exempt for excise & service tax.
Company D also received some income by Sales Promotion fund from manufactures in same sector by display their products. On same income, company D charged service tax.
To sell their products Company is doing intense advertisement on which Company paying service tax.
Question:-
1) Is income from sales is taxable under service tax provisions?
2) Can Company take service tax paid over advertisement as CENVAT input & can set off for service tax payable over Sales promotion Income?
3) Company D already registered in service tax, are we required to register as service provider for this service to take this CENVAT??
17 February 2013
Hey,
Vide Clause (g) of Negative List of Services u/s 66D w.e.f. 1-Jul-2012 service tax is payable only on advertisements on radio or TV.
So its not Taxable Service.
Thanks!!
Vide Clause (g) of Negative List of Services u/s 66D w.e.f. 1-Jul-2012 service tax is payable only on advertisements on radio or TV.
So its not Taxable Service.
Thanks!!
18 February 2013
1. as Said by Vaibhav, Only Advertisement Over TV and radio are Taxable Provided by Advertiser.
2. Yes, if Condition 1 is Satisfied (as mentioned above)
3. Yes, You need to register Separately (Though Condition One is Not satisfied - I Mean Though Its Not Taxable Service) You Need to register With ACES.
2. Yes, if Condition 1 is Satisfied (as mentioned above)
3. Yes, You need to register Separately (Though Condition One is Not satisfied - I Mean Though Its Not Taxable Service) You Need to register With ACES.
18 February 2013
But Pls Keep in Mind,
The Brief of Act says:-
w.e.f. 1-Jul-2012, sale of space in print media, bill boards, public places, buildings, conveyances, cell phones, ATM, internet is not taxable. Aerial advertisement is also not taxable. Only advertisements on radio and TV and sale of time slots by broadcasting organisation is taxable.
The exemption is available only to advertisements and not to other services like designs, advertisements agents. etc. Services provided by advertisement agencies relating to making or preparation of advertisements & commissions received by advertisement agencies from broadcasting & publishing companies would thus be taxable. Moreover, canvassing advertisement for publishing on a commission basis is taxable. Services tax is payable only on commission and not on advertisement charges payable by the advertisement agency to the newspaper, TV or Radio broadcaster, etc. Further, cash discount received from the media is not a service and hence not taxable as held by CESTAT.
Taxability of composite services of providing space for advertisement with taxable service relating to design & preparation of the advertisement will be determined as per the provisions for `bundled services’ stipulated under the Act.
The Brief of Act says:-
w.e.f. 1-Jul-2012, sale of space in print media, bill boards, public places, buildings, conveyances, cell phones, ATM, internet is not taxable. Aerial advertisement is also not taxable. Only advertisements on radio and TV and sale of time slots by broadcasting organisation is taxable.
The exemption is available only to advertisements and not to other services like designs, advertisements agents. etc. Services provided by advertisement agencies relating to making or preparation of advertisements & commissions received by advertisement agencies from broadcasting & publishing companies would thus be taxable. Moreover, canvassing advertisement for publishing on a commission basis is taxable. Services tax is payable only on commission and not on advertisement charges payable by the advertisement agency to the newspaper, TV or Radio broadcaster, etc. Further, cash discount received from the media is not a service and hence not taxable as held by CESTAT.
Taxability of composite services of providing space for advertisement with taxable service relating to design & preparation of the advertisement will be determined as per the provisions for `bundled services’ stipulated under the Act.
18 February 2013
Dear All,
Service is taxable as it is exempt only for advertiser (Except TV & Radio) but not for agents. Here we are acting as an agent.
Now Can we take input & set off against this service tax payable?
Service is taxable as it is exempt only for advertiser (Except TV & Radio) but not for agents. Here we are acting as an agent.
Now Can we take input & set off against this service tax payable?
18 February 2013
Pls Read My First Comment.
I Already Wrote There, If Condition One Satisfied Then CENVAT Credit is Available.
I Already Wrote There, If Condition One Satisfied Then CENVAT Credit is Available.
18 February 2013
and Where You Wrote That You are Acting as a Agent.?
19 February 2013
Hi Ayush,
Sorry for inconvenience. I change my question.
If the output service is sales promotion for other Manufacturers what should be the answer?
Sorry for inconvenience. I change my question.
If the output service is sales promotion for other Manufacturers what should be the answer?
20 February 2013
Then Also Credit is Available.
20 February 2013
Note, final product is exempts from service tax/excise. Now how this credit wiill be Availabe as input. Can we take input on whole or rule of % will apply?
20 February 2013
Rule of % Will Apply.
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