Input Credit

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abhay (Querist)
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11 November 2009 Dear Members,

Clarify whether, “Service tax input accrued during the period prior to excise registration is allowed against discharging excise duty”?. The Company has service tax registration under GTA and is not rendering any output services. Please let me know decided case law, if any, on the above.

Regards
Subrahmanya Hegde

CA Deepak S

CA Deepak S (Expert)
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12 November 2009 In my opinion if the input service on which input credit is accumulated is used in relation to manufacture of excisible goods then you can claim CENVAT credit for discharging excise duty. If it is not used in relation to manufacture of excisible goods then you cannot claim input credit. Further you cannot claim credit on outward GTA services

Guest

Guest (Expert)

12 November 2009 In case of GTA, its a service tax on availment of service. So that you can not utilise any type of cenvat credit to pay service tax under GTA.

One can utilise Cenvat credit on payment of service tax on output service. GTA an itself a tax on input service so that one can not utilise cenvat crdit to pay it.

abhay

abhay (Querist)
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12 November 2009 Dear Members,

Please note input service tax credit pertains to construction work for setting up a new power project for its captive use of manufacturing excisable goods (ferroalloys).

The Company has started construction of power plant in the year 2007 itself however the manufacturing of excisable goods (ferroalloys) was started in November 2008. The excise registration was done in the month of November 2008.

As the Company is not rendering any output service, it has to adjust with excise duty payable.The Company has availed the same but not utilised.

Department (during inspection) is of the view that service tax input pertains to prior excise registration period hence not allowable.

Please advise with case laws, if any.

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