Utilisation of Cenvat Credit on abatement service

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This query is : Resolved

naidu venugopal (Querist)

17 November 2007 Suppose one company is providing 4 no. of services out of which one number is enjoying abatement facility. They are receiving input cenvat bills. Can they utilise that input against the 4 services or not ?

VENU

sivasankar

sivasankar (Expert)

18 November 2007 In my view there is no specific rules in the service tax law regarding your query.
So my personal view is that on the basis of the total four services the abatement relate service tax should be not be taken credit on proportionate basis.
The following formula will decide the value of service tax input credit that should not be considered for credit.
(value of service on which abatement is taken/total value of all four services)X value of credit to be taken for all 4 services

CA MOHIT VAATS

CA MOHIT VAATS (Expert)

19 November 2007 Dear Venugopal,

Yes u r able to use the cenvat credit paid on input to utilise the same for dispose of output liability.

But in case of abetment service u can't take the cenvat credit paid on input.

But in case of rest all service u r able to take the cenvat credit & utilise the same for your liability.......

Dayal

Dayal (Expert)

23 November 2007 You need to maintain separate record for services received on account of services which is subject to abatment.

As the rules are very clear, if you have opted to enjoy abatement, cenvat credit on inputs is to be forgone.