Credit of excise to be set off with service tax

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This query is : Resolved

Gokul Sharma (Querist)

16 January 2016 my client having dealership of vehicles (car). they has service tax liability in servicing work of cars. can he take credit of excise duty on spare part purchase ???? today they are not registered with excise

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Arun Kumar Singh

Arun Kumar Singh (Expert)

17 January 2016 They cannot utilised for payment of service tax from spare parts purchase and excise duty involved in the input.

ANIL JANGID

ANIL JANGID (Expert)

18 January 2016 If you invoice the spare parts separately and pay sales tax/vat on the same then you cannot take the credit of excise duty paid on such spare parts since such activity will amount to trading and trading is excluded from service. Your service of cars will fall under maintenance service and you have to pay service tax on the gross amount charged by you for providing the service.

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