can cenvat credit avail on Service tax on bank charges/comm

Mr. Ajay,

Your company is eligible to avail the Cenvat Credit on "Banking and Financial Services" which is charged by your banker for bank commission, fund transfer charges, Bill collection charges etc.

Thanks,

S. Banerjee

Originally posted by :Ajay
"	We are manufacturers registered with central excise and service tax department.We are not avail cenvat credit on banking service charged by bank i.e. like bank commission,fund transfer charges, Bill collection charges.The bill collection charges charged by bank regarding bills collection amount from our customer towards our sale. Can we avail service tax credit this charges and what is treatment regarding this service.We also find to clarification regarding what type service in which service tax charged by bank.	"

The input services which are used in businss are eligible as per the defintion itslef. Several decision have made this clear. You are eligible to avail the credit

Bank charges are classifed under "Banking & Other Financial Services". Since they are for your business purpose, they fall under the definition of input service under Cenvat Credit Rules 2004.

You can take Cenvat credit BUT you need an invoice/bill/challan with you in case of Dept query. In case of bank, you may only have bank statement. You must maintain the relevant extract of that statement showing that service tax is charged.

Otherwise, in case your Excise inspector asks you for supporting, you may need to pay your bank extra for retriving old bank statements or else reverse the credit.

 

 

 

To avoid any future complicacy you should not make any presonal transaction or transaction for any exempted service  through the accounts against which the bank is charging you commission, and other taxable charges.

Normally Current Account is maintained for business purposes. All the transactions done from this account is a business transaction. Say we take cenvat credit on telephone- how to ensure that no personal call has been made. If internet service, can it be denied because somebody checked his personal mails. Or we take cenvat credit on Airconditioning charges- how to ensure there must not be any personal visitor in office availing the cool air of air conditioner. Siddhartha, it is difficult to impose rules made for goods directly to services. Service are not only intangible, it is indivisible too. If any service is substantially being used for business, it is used for business purpose

Hi

We are manufacturers registered with central excise We are  avail cenvat credit of Service Tax .

If we are service registered with central service Dep.. We are avail cenvate of Excise Duty.

Pl.clarify

Regards

Sanjeev Sharma

Hi

We are manufacturers registered with central excise We are  avail cenvat credit of Service Tax .

If we are service registered( Service Industries) with central service Dep.. We are avail cenvateof Excise Duty.

Pl.clarify

Regards

Sanjeev Sharma

excellent reply by Mr.Rajesh kumar ji

secure the documents from bank where the service tax content is displayed, ( as in audit stage, the credit without supporting documents would be denied) its advised not to take credit on the basis of mere statements, in some places u may feel that the amount of service tax claim is much less than the charges paid to bank for copies or extract required for service tax credit records. 

 

hi,

We are NBFC and the core business is accept public deposits and sanction loan by hypothecation. So please tell what is processore of availing cenvat credit and have we first deposit service tax payable to the department or whether we have to pay tax after avail cenvat credit and please sapecifiy any percentage of dudction and any notification about it.