28 August 2007
The conditions for availing Cenvat credit of service tax are as follows:
1) The invoice should be in your (Company/firm/individual) name stating separately service charges, service tax, service tax regn. number etc.
2) The services has been consumed towards providing taxable services on which sevice tax is applicable or in manufacturing goods on which excise duty is applicable.
If both the conditions are fulfilled, you may avail the cenvat credit of service tax.
17 October 2007
Any amount charged as reimbursement by the contractor will be subject to levy of service tax as it is in relation to providing the services.
The concept of reimbursement has been done away with, in view of the new Valuation Rules, 2006 w.e.f 18/04/2006 which state that value shall be the gross amount charged for the service
The service provided by the contractor ,if is in relation to the dutiable goods manufactured or notified taxable services provided then you can avail the credit of service tax so charged by the contractor
You cannot avail the credit of the service tax charged by the insurance company as the insuree is the contractor and not your goodself. Also the policy is in the name of the contractor
As per provisions of the Rule 4 you will not be eligble however the contractor can avail the benefit of the same.
You are eligble for the service tax charged by the contractor on his invoice on account of reimbursement of insurance charges.
Hope this clarifies your query
should there be a need for any additional clarification do let me know.
CAclubindia
