how to bifercate input service tax credit
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
29 May 2010
a copmany,registered with service tax act, is the dealer of coal . it also raise service bill at head office level for loading and supervision charges. can the company teke input tax benefit on any bill raised on it.please tell whether comapny can't take total input tax benefit on any bill raised on it or company should bifercate input tax credit
Shyam Lal Naik
(Expert)
09 June 2010
From the query, it appears that, the company is engaged in trading of coal(ie purchase and sale) as well as providing output services. You want to know, whether, the credit for various inputs and inpur services can be availed in full for discharging the Service tax Liability.
Similar question has been examined by the Ahmedabad bench of the CESTST recently. The Tribunal held that trading activity is neither manufacturing nor service. Hence there is no application of the rules regarding reversal of proportionate credit used for providing exempted service.
The tribunbal however also observred that, in such a scenerio, the credit should be appropriated. This portion of the judgment is not based on the service tax law/Cenvat Credit Rules and is likely to be challanged at higher judicial forum.
It can be concluded that, as yet, there is no clarity on this issue.
Similar question has been examined by the Ahmedabad bench of the CESTST recently. The Tribunal held that trading activity is neither manufacturing nor service. Hence there is no application of the rules regarding reversal of proportionate credit used for providing exempted service.
The tribunbal however also observred that, in such a scenerio, the credit should be appropriated. This portion of the judgment is not based on the service tax law/Cenvat Credit Rules and is likely to be challanged at higher judicial forum.
It can be concluded that, as yet, there is no clarity on this issue.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Accounting treatment of AMC alongwith the purchase of Laptop
- Unable to File TDS Q2 Return – New TRACES Portal Error
- Condonation Request sec 119(2) b -Enhancement Limit of Leave Exemption prior to AY 2023
- Taxation of crypto futures in India Fy 2026- 2027
- Transfer of Physical Stock Between Two Proprietorship Concerns
- GST Treatment of Purchases with GST Paid where Outward Supplies of Manufactured CattleFeed Exempt
- Not ordinarily resident having partnership income in India and salary in USA is any form to filed be
- Issuing of delivery challan by seller of goods
- EPF ECR NEW RULES Sep 17th 2026
- Expert Help Required for TDS Refund 100000 Through TRACES – AY 2022–23
- IMPORT PURCHASE ENTRY PASSED IN BOOKS OF ACCOUNT
- FAST DS 26 Undisclosed Foreign Asset Disclosure Scheme 2026
- Regime change
- Goods sold but invoice not issued
- Tally: Imported bank entries do not show up in manual reconciliation
- Sales of goods of amount Rs97 lakhs to a party
- Confused About My Career After 12th — Cyber Security, AI or Finance? Need Guidance
- FAST-DS 2026 Under Tax Law - No recourse or support for person declaring via this scheme?
- Guidance Needed: Linking Multiple Form 26QB Payments and Responding to ITD Defaulter Notice
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
