Restaurant service input credit of services

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This query is : Resolved

CA Harikawal Jham (Querist)

17 April 2013 I HAVE TAKEN A RESTAURANT ON RENT, ON WHICH I PAY RENT + SERVICE TAX TO THE LANDLORD.
I HAVE OUTPUT SERVICE TAX ON SALE OF FOOD AS IT IS A AIR CONDITIONED RESTAURANT.
I PAY SERVICE TAX @40% OF VALUE OF TAXABLE SERVICE UNDER RULE 2(C) FOR SALE OF FOOD.
WILL I GET INPUT CREDIT OF S.T. PAID ON RENT AGAINST OUTPUT S.T. ON FOOD ?

CA Sourabh Agarwal

CA Sourabh Agarwal (Expert)

17 April 2013 Following text of Rule 2C of Valuation Rules shall help...

"Explanation 2.—For the removal of doubts, it is clarified that the provider of taxable service shall not take CENVAT credit of duties or cess paid on any goods classifiable under Chapters 1 to 22 of the Central Excise Tariff Act, 1985 (5 of 1986)."

CA Harikawal Jham

CA Harikawal Jham (Querist)

17 April 2013 IT FURTHER SAYS FOR CREDIT OF OTHER INPUTS ( I.E. GOODS OTHER THAN THOSE CLASSIFIABLE UNDER CH 1 TO 22 OF CETA, 1985 ), INPUT SERVICES AND CAPITAL GOODS REFER CENVAT CREDIT RULES.
SO WHAT IS THE POSITION IN THOSE RULES FOR SUCH CREDIT ?

CA Vikas Acharya

CA Vikas Acharya (Expert)

17 April 2013 yes you will get as specifically mentioned in rule 2C of service tax valuation rules,2006, that goods of chapter 1 to 22 is not allowed for ccr.
that means input service and capital goods allowed.

though this is as per my opinion, you may also seek opinion of other experts.

CA Vikas Acharya

CA Vikas Acharya (Expert)

17 April 2013 according to those rules, as per 2(l), it is allowed in the MEANS part of definition.

CA Sourabh Agarwal

CA Sourabh Agarwal (Expert)

17 April 2013 This particular rule does not say the words quoted by you Harikawal Ji. If you are referring some book, then case may be different.

CA Vikas Acharya

CA Vikas Acharya (Expert)

17 April 2013 ca sourabh is is saying correct, its only in your book. not in law.

Shivang Chokshi

Shivang Chokshi (Expert)

08 May 2014 cenvat credit on excise paid on capital goods and s.tax paid on input services is available .. no tax payment on any food items is available as input credit..

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