Service tax credit on tel bills & bank chrgs

03 July 2007
Can service tax credit on Telephone bills & bank charges be claimed for paying service tax.

Amit Thapar (Expert)
03 July 2007

Shashi Mohan Jha (Expert)
04 July 2007
Yes!! it is possible, provided Tel is installed in business (no mobile). Please refer ST.Circular No.59/8/2003 clause 2.8

Shyam Lal Naik (Expert)
04 July 2007
I beg to differ from the opinion expressed regarding eligibllity of Cenvat Credit on mobile phone.

In the case of "Indian Rayon & Industries Ltd. vs. CCE Bhavnagar 2006 (4) STR 79 (Tri-Mumbai)", the Tribunal Held that service tax paid on mobile phone is available as credit to eligible service providers/manufacturers in the absence of any express prohibition under CENVAT Credit Rules, 2004. It is further held that Board's Circular No. 59/8/2003-ST dated 20-06-2003 was relevant only under the erstwhile Service Tax Credit Rules, 2002 and can not be mad applicable to CENVAT Credit Rules, 2004.

Based on the above, Cenvat Credit on telephone bills, whether fixed or mobile, is available - in my opinion.

Shyam Lal Naik (Expert)
05 July 2007

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