Cenvat credit eligibility

Others 872 views 12 replies

Ritish

article

25 Points Joined December 2011

I have a service tax client who has taken a premises on rental basis on 1st April 2014. From 1st April to 21st Sept 2014 work (Furnishing, plumbing etc) on the premise was carried out and no output services were provided for the said period. Can my client claim the cenvat credit on the rent charged by the landlord for the period 1st Apr 2014 to 21st sept 2014 against the service tax liability arising out of the output service provided after 21st Sept 2014.

Note: Prior to April 2014, client was providing output services from some other premise and its turnover has already crossed 10 lacs and it is already registered with the service tax department. However during the said period of Apr 2014 to Sept 2014, it did not provide any output service from the old as well as the new premises

Kindly reply.

Replies (12)

CA Ashish K Bansal

partner

175 Points Joined July 2011

I think we can take the credit as the premises was taken on rent wuth the intention of providing the out put service there. Is no provision in service tax that denies cenvat credit of rent paid while premises was under furnishing

CS Piyush Jain

Practising Company Secretary

1841 Points Joined November 2013

no, sir as per ccr, 2004 input credit can be taken on those services in which the provider is engaged for providing of similar services or processing goods which help in production of the ultimate output .

eg :- if a tailor provides a service of stichting cloth he cant take benefit of ccr on some construction of his shop or interior designing as it doesnt contribute to his service directly or indirectly ..

CA Ashish K Bansal

partner

175 Points Joined July 2011

It a chartered accountant pays service tax on rent of his office premises he can claimthe same as cenvat further he can also claim the service tax on rent as cenvat whwhile his office was under furnishing there is no conflict as suggested by you piyush

CA Ashish K Bansal

partner

175 Points Joined July 2011

The tailor can also claim service tax on rent for his shop even service tax charged by his interior designer fir designibg yhe shop all these service relates to shop which is used by tailor fir providing his services if shop is not their he would not be able to provide his services

Roma Prajapati

Student CA Final

44 Points Joined November 2013

Yes he can claim the cenvat credit

Roma Prajapati

Student CA Final

44 Points Joined November 2013

There is no one to one co- relation for getting a cenvat ....even though s.p not providing service from April to sep ....he can claim the credit as per judgment in case of Blue star ltd....

dhaval

Auditor

118 Points Joined August 2010

Yes he can claim service tax credit

Tarun

216 Points Joined September 2014

See the period from april to march...not april to september output credit within this period can be settled..so take credit

CS Piyush Jain

Practising Company Secretary

1841 Points Joined November 2013

thanku CA ashish sir for rectifying me ..

Ritish

article

25 Points Joined December 2011

Thank u all for your replies... It was really helpful...

CA Ashish K Bansal

partner

175 Points Joined July 2011

You are always welcome

mehul

ca final student

83 Points Joined October 2008

as per service tax rules, there is no need to corelate input service with output service.

if new premises registered with service tax authorities and applied for addition of branch under centralised registration or taken new certificate for new branch, service tax setoff can be availed against your liability.

only cenvat on expenses incurred for setting up of an office is not allowed.