Cenvat credit allowed with abatement

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)
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.

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 ??

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.

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