RENT ON SERVICES
This query is : Resolved
K.SARAVANAN
(Querist)
22 February 2008
WE HAVE COLLECTING SERVICE TAX FOR RENT ON FACTORY BUILDING AND ADJUST THE SERVICE TAX IN OUR CAPITAL GOODS CREDIT... WE ARE THE MANUFACTURING COMPANY.. THE C.E.RANGE OFFICIALS ASK A CLARIFICATION REGARDING ADJUSTNG OF SERVICE TAX ON RENT WITH CAPITAL GOODS CREDIT NO WAY CONNECTED TO MANUFACURE...
KINDLY ADVISE ME...
KINDLY ADVISE ME...
S.Srinivasaraghavan
(Expert)
22 February 2008
The service tax on rent will be collected by your bill on your tenant. This service tax you will pay to the department. How will you adjust this against the credit you have availed on capital goods (is it Excise duty?)? What is the correlation, from your side you please explain more clearly for us to respond.
22 February 2008
SECTION 94(OF FIN. ACT 1994) PROVIDES FOR CREDIT OF SERVICE TAX PAID ON INPUT SERVICES USED IN OUTPUT SERVICES WHERE BOTH INPUT AND OUTPUT SERVICES FALL WITHIN THE SAME CATEGORY OF TAXABLE SERVICES . SINCE YOUR CATEGORY OF INPUT AND OUTPUT SERVICES FALL IN DIFFERENT CATEGORIES, YOU DO NOT SATISFY THE ABOVE CRITERION AND NOT ENTITLED FOR ADJUSTING SERV. TAX.
R.V.RAO
R.V.RAO
K.SARAVANAN
(Querist)
23 February 2008
dear sir thanks for your advice..
we have collecting service tax on our service invoices and the same will be adjust aginst our input and capital goods credit availed thru excise duty and we have not paid service tax to the dept..similar in nature the output service rendered by way of rent also we have using our cenvat credit...i belive as per cenvat credit rules 2004, there is no such limit for using cenvat credit for output servie either excise duty or service tax.. subject of manufacture is only considered for availment of input services and capital goods.kindly clarify sir...
we have collecting service tax on our service invoices and the same will be adjust aginst our input and capital goods credit availed thru excise duty and we have not paid service tax to the dept..similar in nature the output service rendered by way of rent also we have using our cenvat credit...i belive as per cenvat credit rules 2004, there is no such limit for using cenvat credit for output servie either excise duty or service tax.. subject of manufacture is only considered for availment of input services and capital goods.kindly clarify sir...
K.SARAVANAN
(Querist)
23 February 2008
dear sir thanks for your advice..
we have collecting service tax on our service invoices and the same will be adjust aginst our input and capital goods credit availed thru excise duty and we have not paid service tax to the dept..similar in nature the output service rendered by way of rent also we have using our cenvat credit...i belive as per cenvat credit rules 2004, there is no such limit for using cenvat credit for output servie either excise duty or service tax.. subject of manufacture is only considered for availment of input services and capital goods.kindly clarify sir...
we have collecting service tax on our service invoices and the same will be adjust aginst our input and capital goods credit availed thru excise duty and we have not paid service tax to the dept..similar in nature the output service rendered by way of rent also we have using our cenvat credit...i belive as per cenvat credit rules 2004, there is no such limit for using cenvat credit for output servie either excise duty or service tax.. subject of manufacture is only considered for availment of input services and capital goods.kindly clarify sir...
S.Srinivasaraghavan
(Expert)
25 February 2008
The query from our side is how are you establishing that the service tax collected by you on renting services (payable to the department by you) and the excise duty on the capital goods (purchased by you with excise duty credit)are falling under the same category?
K.SARAVANAN
(Querist)
25 February 2008
dear sirs...thanks once again...
i can understand they are difference catagories.. kindly provide the relevant notification or c.e.act regarding utisation of input services...
i can understand they are difference catagories.. kindly provide the relevant notification or c.e.act regarding utisation of input services...
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