cenvat credit of service tax

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 One of our clients is paying lease rentals on a restaurant taken on lease by him. he has to pay service tax @ 12.36 % on it. please suggest some mode by which he can take the credit of the service tax paid on lease rentals. He pays VAT on the goods purchased by him but it is not allowed to set off the VAT against the service tax liability. So please suggest some means by which the service tax liability can be reduced to minimum. The lease rentals are being paid for the complete set up which includes crockery, furniture and other things.

 

Replies (5)

Service tax can be set off against service tax and excise. Service tax cannot be adjusted against VAT as VAT is a state tax and Excise is Central Tax. 

Hello Sir,

Can you explain me the procedure for claiming input credit of service tax against excise duty paid, can additional customs duty paid be availed for input credit of service tax. ?

Hi Mukesh

 

Service tax credit can be set off against service tax payable not with any other tax liability.

 

Mr. Jyoti,

I am afraid but you are totally wrong. Input Service credit is a part of cenvat Credit & it can be utilised for the payment of Both Output Service Tax as well as for Excise Duty Liabilty as told by Mr. Swaminathan.

For further clarification,please  refer Rule3(4) read with Rule3(1) of Cenvat Credit Rules,2004

 

Mr. Mukesh,

I am not so clear with your query. If your Client is paying Lease Rent, in such scenario, it is the liability of Lessor to pay Service Tax.or Is it your Client having some other Service Tax liability? Please clarify

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