20 April 2013
I am considering assessee is service provider only and question in for availability of credit on input service for an exempted service provided.
As per Rule 3 (1) of CENVAT Credit Rules, 2004 credit of service tax is available on input services received by the provider of output services. Now as per Rule 2(p) of CENVAT Credit Rules,2004 output service does not include service specified in Sec 66D (negative list of services). So credit not allowed on input services used in services mentioned in Sec 66D. Now there is mega exemption notification where a lot of services exempted. for these one need to go to Rule 6 of CENVAT credit rules where different methods are mentioned for calculation of CENVAT credit available in case on assessee providing taxable as well as exempted output services.
if assessee is providing only exempted service mentioned either in sec 66D or mega exemption notification then no CENVAT credit is available.
But it does not cover export of services, in those cases credit is available.
Pls. consult to your consultant before relying on above opinion.
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