Dear sirs,
One of our client is a service provider. He is collecting service tax from his client. Now he brought capital goods by paying Central Excise. He is arguing that he can claim that excise duty as CENVAT Credit against sevice tax payable by him. My question is , is it possible for set off service tax collected against Excise duty paid on capital goods. please guide me in this case
Hi........Joji
If Capital goods usr for the providing of Taxable services, then your client can take credit of excise paid on such capital goods. 50% of credit in same financial year and rest 50% next financial year. For more details you can also see the Rule No 3 & 4 of cenvat credit.
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