claiming cenvat on goods

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This query is : Resolved

aravind (Querist)

15 December 2009 hai friends,
This is Aravind. please clarify my doubt.
the case study is as follows.
we have a client who is operating in automobile industry and is having a maruti showroom and a service work shop.
Client is purchasing cars from maruti, the price of the cars include cenvat also.
now on the other hand he is a service provider also.he is collecting service tax on the services provided to his customers from them.

Now my query is that while paying the service tax, whether he can claim the cenvat credit that is paid on the purchase of cars.
NOTE:the client is not having any excisable activity and is not liable to pay excise duty.

please clarify my query.
with regars,
Aravind.

Madhukar N Hiregange

Madhukar N Hiregange (Expert)

15 December 2009 He is not eligible for cenvta credit on the cars since he netiehr used the cars for provding the service nor is it an expenditutre for business.
Other input services, inputs ( grease/ paints) etc which he may uise for the servicing would be available if he chooses to pay the ST on the gross amouint without going for any abatement.

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