Some ready made garment manufacturers are availing cenvat credit of service tax paid by them on rent paid on rent paid for show cooms where no manufacturing activity is carried out, The show rooms are used only for trading of the duty paid garments received there. In view of the recent clarifications given by the ;board, no credit can be availed in espect of services used in trading.For availing wrong cenvat credit, they would render themselves liable for penal action.
if they issue invoice of excise from showroom and pay duty at showroom transaction price, i.e point of sale is considered at show room then such input credit is available, otherwise not.
The show room can not issue a tax invoice showing central excise duty separately. The invoice that the show froom issues is a all inclusive. As per C.Ex. Notification No.19/2011 the the duty is to be discharged by the brand owner, as such tax invoice can only be issued by the brand owner taking registrtation. Since no tax invoice can be issued and no duty is paid by the show room, credit of service tax on rent would not be admissible.
CMNITY HIRE
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