utilisation of service tax credit

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

27 January 2010 Respected Experts
One concern is providing two different services viz. beauty parlour service and engineering consultancy.

My question is: Can input credit of beauty parlour services be utilised for the payment of engineering consultancy service tax.

Jitender

Jitender (Expert)
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27 January 2010 yes, it can be utilized.

Querist : Anonymous

Querist : Anonymous (Querist)

28 January 2010 Respected Experts
One concern is providing two different services viz. beauty parlour service and engineering consultancy.

My question is: Can input credit of beauty parlour services be utilised for the payment of engineering consultancy service tax.

Aashok Kumar Sharma

Aashok Kumar Sharma

(Expert)
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02 August 2025 Your question relates to **cross-utilisation of CENVAT credit** between two different taxable services under the old **Service Tax regime**.

### ✅ Short Answer:

**Yes**, the input service tax credit can be utilised across different output services **provided both are taxable services** and the credit is **eligible under CENVAT Credit Rules, 2004**.

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### 📘 Explanation:

Under **Rule 3 of the CENVAT Credit Rules, 2004**, a service provider could avail credit of input services used for providing any **output service**, subject to:

* Both services (beauty parlour and engineering consultancy) are **taxable**.
* The **input services** are used in or in relation to the provision of taxable output services.
* You maintain **proper documentation and invoices** to support the credit claim.

There was **no restriction** that input services for a particular type of taxable output service could not be used for another taxable service, **unless** the input is exclusively used for exempted services.

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### 🚫 When Credit Is Not Allowed:

If one of the services was **exempted or under a composition scheme**, then **Rule 6 of CENVAT Credit Rules** would apply, restricting or proportioning the credit.

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### ✅ Conclusion:

Since both **beauty parlour services** and **engineering consultancy services** were taxable, input service credit from one can be used to pay service tax liability on the other—**subject to compliance** with documentation and input-output linkage.

Would you like a draft format for record-keeping or internal documentation to support this credit use?

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