CENVAT CREDIT

Dear Josi Jose,

Cenvat Credit of Excise Duty paid on Capital Goods can be setoff against the service tax liability.

Conditions

1) Capital Good must be specified in the Defination of capital goods under Rule 2

2) Capital goods must be used for providing taxable service (not necessarily the one against which credit is to be utilized)

3) Credit is available in 2 years - 50% each

4) Abatement should not be claimed on output service

Dear Josi Jose,

Agree with Mr.Amir brother

Cenvat Credit of Excise Duty paid on Capital Goods can be setoff against the service tax liability.

Capital Good must be specified in the Definition of capital goods

Capital goods must be used for providing taxable service (not necessarily the one against which credit is to be utilized)

Credit is available in 2 years - 50% each

Abatement should not be claimed on output service

Agree with Amir

Abataement 1/06 requires that no credit be claimed. However not.12/2003 or compostion shcemes do not require the same. The abatement notification should be seen to see if the condition of CG credit is expressly excluded. Otherwsie it would be available.