Service tax inputs
This query is : Resolved
26 August 2013
Dear Members,
one of our client is Civil Contractor having misc. projects in different state.
They have registered in One State their they provide Taxable service, but in two
other states they not registered because of not taxable services.
my query is :-
1. is Service Tax paid to Banks for Bank Guaranty is eligible for Cenvat.
2. Paid to Legal practitioner in HO level is eligible for Cenvat.
3. Capital goods like vehicles & Machinery purchased by Company is eligible for
Cenvat.
4. Service Tax paid on Telephone bills is eligible for Cenvat.
kindly guide.
with regards
CA Ashok Kumar Sahu
one of our client is Civil Contractor having misc. projects in different state.
They have registered in One State their they provide Taxable service, but in two
other states they not registered because of not taxable services.
my query is :-
1. is Service Tax paid to Banks for Bank Guaranty is eligible for Cenvat.
2. Paid to Legal practitioner in HO level is eligible for Cenvat.
3. Capital goods like vehicles & Machinery purchased by Company is eligible for
Cenvat.
4. Service Tax paid on Telephone bills is eligible for Cenvat.
kindly guide.
with regards
CA Ashok Kumar Sahu
27 August 2013
Maybe they can opt for centralised registration if they provide services in several state.
They are eligible for all the services as credits. However the same wouldbe subject to Rule 6 (3) proportion of exempted services to total. 100% credit on capital goods used even partially in taxable projects is available.
They are eligible for all the services as credits. However the same wouldbe subject to Rule 6 (3) proportion of exempted services to total. 100% credit on capital goods used even partially in taxable projects is available.
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28 August 2013
thanks for your quick reply.
we want another advice-
they applied for Centralized Registration but in one other state they have provide taxable service from Jan. 2012, but not made separate registration on that State.
Can we filled consolidated return as per Centralized Registration no for the period of Oct to March 2013.
kindly guide
CA Ashok Sahu
we want another advice-
they applied for Centralized Registration but in one other state they have provide taxable service from Jan. 2012, but not made separate registration on that State.
Can we filled consolidated return as per Centralized Registration no for the period of Oct to March 2013.
kindly guide
CA Ashok Sahu
24 July 2025
Here’s a breakdown of your queries based on service tax rules and Cenvat Credit provisions for a civil contractor operating in multiple states with centralized registration:
---
### 1. **Is Service Tax paid to Banks for Bank Guarantee eligible for Cenvat Credit?**
* **Yes.** Bank guarantee services are covered under “Banking and Other Financial Services” which are input services eligible for Cenvat credit as per Rule 2(l) of Cenvat Credit Rules, 2004.
* The credit can be taken if these services are used for taxable services.
---
### 2. **Is Service Tax paid to Legal Practitioner at HO level eligible for Cenvat Credit?**
* **Yes.** Legal services are also input services eligible for Cenvat credit, provided they relate to the business and taxable services.
* The legal services paid at HO level can be availed as credit and can be distributed to branches under ISD registration.
---
### 3. **Are capital goods like vehicles & machinery purchased by company eligible for Cenvat?**
* **Capital goods used for providing taxable services** (even partially) are eligible for 100% Cenvat credit as per Rule 3 of Cenvat Credit Rules.
* However, vehicles are generally eligible only if they are used for specific purposes like transportation of goods or employees, not for personal use.
---
### 4. **Is Service Tax paid on Telephone bills eligible for Cenvat Credit?**
* **Yes.** Telephone services are input services eligible for Cenvat credit if used for business purposes and taxable services.
* If used partly for exempt services, proportionate credit has to be reversed.
---
### Additional Query:
**Centralized Registration & Consolidated Returns**
* If your client has obtained Centralized Registration (CR), they must file consolidated returns using the CR number.
* For states where taxable services were provided but no separate registration was taken, it is advisable to either:
* Obtain registration retrospectively in those states; or
* Ensure proper disclosure and payment of tax along with interest/penalty if applicable.
* You **can file consolidated returns under CR number for the entire period** if all services fall under the same service category and jurisdiction permits.
* However, non-registration in states where taxable services are provided can attract penalty and interest.
* Filing consolidated return does not substitute for mandatory registration requirements in those states.
---
If you want, I can help draft a formal advisory or outline the relevant legal provisions for these points. Would you like that?
---
### 1. **Is Service Tax paid to Banks for Bank Guarantee eligible for Cenvat Credit?**
* **Yes.** Bank guarantee services are covered under “Banking and Other Financial Services” which are input services eligible for Cenvat credit as per Rule 2(l) of Cenvat Credit Rules, 2004.
* The credit can be taken if these services are used for taxable services.
---
### 2. **Is Service Tax paid to Legal Practitioner at HO level eligible for Cenvat Credit?**
* **Yes.** Legal services are also input services eligible for Cenvat credit, provided they relate to the business and taxable services.
* The legal services paid at HO level can be availed as credit and can be distributed to branches under ISD registration.
---
### 3. **Are capital goods like vehicles & machinery purchased by company eligible for Cenvat?**
* **Capital goods used for providing taxable services** (even partially) are eligible for 100% Cenvat credit as per Rule 3 of Cenvat Credit Rules.
* However, vehicles are generally eligible only if they are used for specific purposes like transportation of goods or employees, not for personal use.
---
### 4. **Is Service Tax paid on Telephone bills eligible for Cenvat Credit?**
* **Yes.** Telephone services are input services eligible for Cenvat credit if used for business purposes and taxable services.
* If used partly for exempt services, proportionate credit has to be reversed.
---
### Additional Query:
**Centralized Registration & Consolidated Returns**
* If your client has obtained Centralized Registration (CR), they must file consolidated returns using the CR number.
* For states where taxable services were provided but no separate registration was taken, it is advisable to either:
* Obtain registration retrospectively in those states; or
* Ensure proper disclosure and payment of tax along with interest/penalty if applicable.
* You **can file consolidated returns under CR number for the entire period** if all services fall under the same service category and jurisdiction permits.
* However, non-registration in states where taxable services are provided can attract penalty and interest.
* Filing consolidated return does not substitute for mandatory registration requirements in those states.
---
If you want, I can help draft a formal advisory or outline the relevant legal provisions for these points. Would you like that?
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