Cenvat credit of service tax on loan processing fees?

Dear All,

Kindly advice on this piece of querry,

A manufacturing concern has applied for a loan from Bank. The bank as usual charges service tax on Loan processing fees and also on bank charges and OD/CC charges.

So my querry is simple, whether the manufacturing concern will be allowed credit of Service tax on these loan processing fees and the Bank charges or OD/CC charges?

Also will your answer change if the manufacturing concern is also registered for Service tax and is paying service tax on regular basis as well as on reverse charge basis?

Replies (1)

You can take the cenvat credit of service tax involved in the loan. Manufacturer will pay the service tax under reverse charge system vide notification no. 30/2012-ST and can take the cenvat credit after duty payment. 

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