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CENVAT Credit availability

Queries 881 views 3 replies

A person providing taxable services as well as selling goods by utilising input services which are common for both output sales and output services. Can he avail and utilize the entire service tax paid on input services against the output services tax liability?

Replies (3)

Swapnil

You can see the Rule 6 of CENVA Credit Rules. It may help you.

I have gone thru the CENVAT credit rules...It says CENVAT Credit can be taken on input Services to the extent these services are used by the service provider in order to provide his own output services to its customers..

The ambiguity about availing CENVAT credit, arises in this case as the services which the person is now using, go in to both the output services provided by him as well as the goods sold by him...For Eg The person pays ST on Consultancy Charges. This consultancy service is used by him to provide service as well as to sell the goods to its cutomers.

My query is whether the person can utilise 100% of the Service Tax paid on inputs(whole of the ST on consultancy charges in the aboce eg.) as CENVAT credit even if the said services are used for providing output service and selling of goods?Or there is any other provision in this regard?

Thanks.

Dear Swapnil,

 100% Cenvat Credit can be availed in following cases

1) if such person is paying excise duty on the goods or

2) Specified Input services 

Otherwise detailed procedure prescribed under Rule 6 has to followed regarding "Taking Credit on Estimation Basis or Reversal of credit"


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