Rule 6 cenvat credit

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This query is : Resolved

kamal (Querist)

19 August 2011
Sir

I am working with a Saloon We have provide Services as well as we sale product.
But the Mainly worked as Services Salesing of Product is a secoundery purpose.

In the last 6month we provide services of 12 Lac and Product sale only 3 Lac.
We have cenvat Credit of Rs. 1 Lac as per above our liablity of Service Tax is 1.23 Lac

Should we take full Credit of Cenvat or We have to leave 25 % of Credit and took only 75000.00

Please advice

U S Sharma

U S Sharma (Expert)

19 August 2011 you are eligible for 100% credit of inputs/ input services used in taxable services, but not eligible for any credit on goods which is sold.

once cenvat credit is availed, exemption of 10L can not be availed.

kamal

kamal (Querist)

19 August 2011 Thanks Mr Sharma

We are paying rent as well as Service tax on such rent and take credit of that only.

We already take the benifit the 10L Limited now we are taxable entity

For the purpose of Rent paid we cannot segregate the Cenvat Credit because we basically provide services a part to incurage the servcives we provide products to customer.

We have small rak where the products are arranged.

Now how can we segregate the Canvat.
The Service Tax Officer need clarification for such act.
Please Help

Madhukar N Hiregange

Madhukar N Hiregange (Expert)

22 August 2011 Please read rule 6 which provides that the differecne between the sale and purchase price or 10% [ in your case 30k] wouldbe considered as exempt services. The same shouldbe segregated and balance eligible credit can be availed.

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