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About input credit

Nagesh Midde (student) (191 Points)

03 February 2009

Dear Friends.... let me know about input credit details...... our company is a service provider of twe categories. one is Business Support Service (BSS) and another one Transportation of goods by Road..... Second one has abatement 75%. Can we avail input credit (what we actual got on Transport i.e.3.09%) in the category BSS?....

(e.g. We got ST Credit 3.09% on goods transportation by road.... Can I get this input credit in BSS ?) please clearify..........

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7 Replies

Madhukar N Hiregange (Chartered Accountant) (38934 Points)
Replied 05 February 2009

The input services credit is available if the same is used for provding the output services and if the same is used in activity of business. However if the same is used in non taxable services or for trading the credit would not be available.

What is the specific BSS service you provide may provide addtional information to reply.

Sowmya P K (Chartered Accountant) (251 Points)
Replied 07 February 2009

hii.. i have a query regarding input credit on mobile phone bills... the company is into consulting business and the employees are reimbursed their mobile phone charges.... whether input credit can be availed on such expenses as the phone nos are in the name of the employees and not in the name of the company... the reimbursement is accounted as Telephone Charges... thanks in advance

(Guest)

As the phone nos are in the name of the employees, the bills raised by telcos are not eligible documents for the company to avail CENVAT credit. You cannot take credit on ineligible document.

bhoop (account) (99 Points)
Replied 10 February 2009

Thanks Mr. Agrawal, Please clearfy me that we are in hotel industry and we provide cab service to guest and charged 4.944% service tax but same service is outsourced. Outsourced Company also charged 4.944% service tax to us. So clarify can we take input of service tax against other service.

Bhoop SIngh

Rajesh Kumar (Advocate- Tax) (7806 Points)
Replied 10 February 2009

Yes.

Sowmya P K (Chartered Accountant) (251 Points)
Replied 10 February 2009

Thank you Mr. Aggarwal

Madhukar N Hiregange (Chartered Accountant) (38934 Points)
Replied 11 February 2009

The cenvat credit scheme is one of facilitation. Therefore though it is preferable that the bills be in the names of the concern, it is not essential. If the same are used exclusively for the business then they shouldbe available. You may estimate the number of personal calls / have a %age used for personal and claim the balance. However the same maybe disputed by the revenue.

There are a number of decisions in central excise where the cenvat credit was allowed once it was proved that the materials had been received and used in manufacture of excisable goods even though the document may not have been in the name of the reciver.