Service tax
This query is : Resolved
26 September 2013
Dear Sir,
We are manufacturer of auto part, can we take the service tax on telephone bill’s.
We are manufacturer of auto part, can we take the service tax on telephone bill’s.
26 September 2013
As per rule 3 of CENVAT Credit rules you are eligible for credit of service tax paid on all input services
disclaimer- all answers are given as per the facts narrated by you. Answer may differ after study of full facts/statements/agreements etc. involved in the case
disclaimer- all answers are given as per the facts narrated by you. Answer may differ after study of full facts/statements/agreements etc. involved in the case
27 September 2013
Can you send me case law case against telephone service tax credit which are strong and help for us for taking service tax credit.
24 July 2025
Query:
Can a manufacturer (of auto parts) take CENVAT credit of service tax paid on telephone bills? Any strong case law support?
✅ Answer: YES, CENVAT credit on telephone/mobile bills can be claimed, provided the following conditions are satisfied:
🔹 Legal Basis:
Under Rule 2(l) and Rule 3 of the CENVAT Credit Rules, 2004, manufacturers are allowed to take credit of input services used in or in relation to manufacture of final products.
The definition of “input service” includes:
“Any service used by the manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products…”
Telephone service (including landline/mobile/internet) is typically treated as input service, especially if:
Used in the factory or registered office
Related to administrative, marketing, or production activities
🔹 Conditions to Claim Credit:
The telephone number should be registered in the company’s name.
The bill should be addressed to the manufacturer’s registered premises.
The service should not be exclusively used for personal purposes.
The service should be used in the course of business (e.g. sales coordination, admin, supply chain, etc.).
🔹 Case Laws Supporting Credit on Telephone Services:
✅ 1. CCE v. Ultratech Cement Ltd. (2010) 20 STR 577 (Bom)
Bombay HC held that input services are eligible for credit if they are used in or in relation to the business of manufacturing.
Telephone services were considered allowable as part of business operations.
✅ 2. Coca-Cola India Pvt. Ltd. v. CCE (2009) 15 STR 657 (Bom)
High Court ruled that any service which forms part of business expenses qualifies as input service.
Telephone charges, advertising, sales promotion, and even audits were allowed.
✅ 3. CCE v. Manikgarh Cement (2010) 20 STR 456 (Bom)
Telephone and mobile expenses were held to be eligible input services as they relate to business activities.
⚠️ When CENVAT Credit May Be Denied:
If the mobile/telephone bills are in the name of individual employees (not the company).
If service is used for personal or non-business use.
✅ Conclusion:
Yes, your company — as an auto part manufacturer — can claim CENVAT credit on telephone bills if they are used for business and invoices are properly in company’s name. The cited case laws strengthen your position in case of any scrutiny.
Let me know if you need:
Draft reply to a department query
Format for CENVAT credit register
Case law summaries in PDF format
Can a manufacturer (of auto parts) take CENVAT credit of service tax paid on telephone bills? Any strong case law support?
✅ Answer: YES, CENVAT credit on telephone/mobile bills can be claimed, provided the following conditions are satisfied:
🔹 Legal Basis:
Under Rule 2(l) and Rule 3 of the CENVAT Credit Rules, 2004, manufacturers are allowed to take credit of input services used in or in relation to manufacture of final products.
The definition of “input service” includes:
“Any service used by the manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products…”
Telephone service (including landline/mobile/internet) is typically treated as input service, especially if:
Used in the factory or registered office
Related to administrative, marketing, or production activities
🔹 Conditions to Claim Credit:
The telephone number should be registered in the company’s name.
The bill should be addressed to the manufacturer’s registered premises.
The service should not be exclusively used for personal purposes.
The service should be used in the course of business (e.g. sales coordination, admin, supply chain, etc.).
🔹 Case Laws Supporting Credit on Telephone Services:
✅ 1. CCE v. Ultratech Cement Ltd. (2010) 20 STR 577 (Bom)
Bombay HC held that input services are eligible for credit if they are used in or in relation to the business of manufacturing.
Telephone services were considered allowable as part of business operations.
✅ 2. Coca-Cola India Pvt. Ltd. v. CCE (2009) 15 STR 657 (Bom)
High Court ruled that any service which forms part of business expenses qualifies as input service.
Telephone charges, advertising, sales promotion, and even audits were allowed.
✅ 3. CCE v. Manikgarh Cement (2010) 20 STR 456 (Bom)
Telephone and mobile expenses were held to be eligible input services as they relate to business activities.
⚠️ When CENVAT Credit May Be Denied:
If the mobile/telephone bills are in the name of individual employees (not the company).
If service is used for personal or non-business use.
✅ Conclusion:
Yes, your company — as an auto part manufacturer — can claim CENVAT credit on telephone bills if they are used for business and invoices are properly in company’s name. The cited case laws strengthen your position in case of any scrutiny.
Let me know if you need:
Draft reply to a department query
Format for CENVAT credit register
Case law summaries in PDF format
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