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Cenvat credit
My co.provide performance bank guarantees to our clients. Guarantees are isssued after the goods are sold. This guarantees are obligatory as per terms of Order.Banks charge commission for such guarantees issued by them in favour of our clients. Commission is normally 2% of the amount per annum. Banks also charge 14% or applicable service tax on these commissions.Can we take CENVAT CREDIT for the service tax paid on such guarantee commission?
Replies (2)
As per Cenvat Credit rules, you can take cenvat credit for any input good or service you have received on which excise duty or service tax was paid.
So for your company, you should be able to take Cenvat credit for the service tax charged by bank on commission.
In order to understand whether you can claim the input credit or not. Please clarify
Commission will be paid by you or your customers. If you paid the commission, how you are charging your fee like with a break up of commission or as a whole amount
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