Input credit eligibility as to service tax paid on rent

This query is : Resolved

CA Sanjay Baheti (Querist)
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20 October 2014 One of my client registered with ST Dept. under Restaurant Services.

my client has taken the said restaurant on Rent & paying rent along with Service tax Portion on monthly basis to landlord who also covered under service tax net for Renting of Immovable Property.

Also My client is availing Abatement benefit for the said restaurant services @ 60% by virtue of Notification 26 of 2012 as per Service Tax law i.e. he is paying Service tax only for 40% of Taxable value.

Now query is whether my client can claim as input credit for service tax paid on renting of said property at where he is carrying/providing restaurant services from his Service tax liability on restaurant Services as taxable services after availing benefit of abatement under notification 26 of 2012 or not.

Please reply at the earliest

Annu Agarwal

Annu Agarwal (Expert)
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20 October 2014 Your client can take cenvat credit of the service tax paid on rent.He can also avail the abatement of 60%.As per notification no.13/2012,he cannot take cenvat credit of goods if he avails the abatement.There is no restriction on input services credit.

Annu Agarwal

Annu Agarwal (Expert)
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20 October 2014 Also you can refer the link https://www.nrai.org/service-tax

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