SERVICE TAX CREDIT ON MOBILE BILL

This query is : Resolved

CA Saurabh Maheshwari (Querist)
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05 March 2008 CAN SERVICE TAX CREDIT ON MOBILE BILL BE ALLOWABLE . THE CREDIT FOR THE FIXED LINES ARE ALLOWABLE BECAUSE THEY ARE CONSIDERED THAT THEY ARE USED IN RELATION TO THE BUSINESS,BUT BEING THE MOVABILITY OF MOBILE PHONE THEY ARE NOT CONSIDERED THAT THEY ARE SPECFICALLY USED FOR THE PURPOSE OF BUSINESS.PLEASE CLARIFY AND GIVE REFERENCE IN REGARD TO ANSWER

Dayal

Dayal (Expert)
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05 March 2008 In regard to credit of service tax on telephone connection, queries have been raised as to whether service tax credit would be admissible on telephone sets installed only in the business premises. The answer is in the affirmative, and credit will be allowed only on telephone sets installed in the business premises. Mobile phones are not covered.”

The abovesaid Circular was issued keeping into consideration the Service Tax Credit Rules, 2002 in force at that time which have since been superseded vide Notification No. 23/2004-Central Excise (Non-Tariff) dated the 10th September, 2004 by CENVAT Credit Rules, 2004.

The master circular 96 & 97 issued in august 2007 clarifies the credit eligibility.

However this is eligible to post paid services only where bill is in the name of the company, firm or any undertaking other than an individual.

the payment if made by individual and reimbursed by firm / company will not be eligible for credit

SIVAKUMAR

SIVAKUMAR (Expert)
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05 March 2008 Telephone Bill Service Tax amount is one of the Input Tax Credit. This Credit is not eligible to adjust the service tax payable amount.

K.K.Majhi

K.K.Majhi (Expert)
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06 March 2008 Before taking credit of service tax paid on mobile bills it has to be proved that such has been purely used for business purpose, however where coporate connection has been taken and which is used for business purpose credit of service tax paid can be taken.

Arbind Aggarwal

Arbind Aggarwal (Expert)
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09 March 2008 I agree with the views of Mr.Dayal, credit is certainly available on all types of telephones, used for business purpose and bill is in the company's name and paid by the company.

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