input tax credit availment

This query is : Resolved

Pragya Dash (Querist)
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11 February 2009 Expenses (Lease Rent) along with Service Tax accrued in Oct~Dec’08 but paid in Jan~Mar’09. Whereas company did not have taxable income in Oct~Dec08 but It has 50% of revenue from Taxable Services, can the company claim set off of 50% of aforesaid service tax amount in Jan~Mar’09 (since set off of service tax is claimable in the period during which payment is made)

Also can the company carry forward Service Tax incurred on Lease Rent capitalised (during construction period) for set off against future taxable income (though it may provide exempt service in the interim period partly or fully)

Dayal

Dayal (Expert)
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19 April 2009 The first part is not clear, please elaborate on the subject transaction

Regarding second part, what is capitalized (service tax) cannot be availed of as Cenvat input credit, if you have not capitalized the service tax component than you can c/f and utilise to the extent of taxable service only. If exempt service is intended to be provided simultaneously then c/fd only the attributable credit or reverse the same at a later date