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Cenvat credit allowed with abatement

abatements 14420 views 3 replies

CA Ruchika Jain

54 Points Joined February 2012

Hi Friends,

I am new to the Hotel industry and request you to provide clarification on recent provisions regarding Cenvat Credit allowed with Abatement.

My question is whether Hotel can avail cenvat credit of Rent paid (Which is more then service tax liability under head of Renting of Hotel and Restaurant) and service tax charge on telephone expenses etc..

Thanks

Replies (3)

Ajit kumar Dubey

Taxation Manager

637 Points Joined September 2008

Yes you can avail the credit of input services only while availing an abatement of 40% of the gross bill as per Notification no. 26/2012 (service tax). Hope it will solve your query.

CA Ruchika Jain

54 Points Joined February 2012

The notification does not talk about service tax on supply of food items in restaurant, so does that means no cenvat credit allowed on service tax paid on this servce ??

Ajit kumar Dubey

Taxation Manager

637 Points Joined September 2008

The notification says that input credit cannot be taken on Capital goods and inputs, there is no exclusion of input services. So if the type of service received by you is in the nomenclature of input services as defined in rule 2 of CCR, 2004 you will be eligible for the CENVAT credit.