Cenvat credit of services

Input servies relating to setting up of factory do not qualify for cenvat credit.

@ CA Unnikrishnan Nair NSir , please quote the relevant rule of CCR

Thanks

Thanks Mr. Unnikrishnan...Kindly advice the relevant rule which says that CENVAT Credit of Services on capital goods cannot be claimed?Also advice if we can take cenvat creadit of excise duty on capital goods before commencement of commercial production? pls aadvice relevant rule.

can anyone advice the relevant rule in this regard?

Rule 3. CENVAT credit. ---(1) A manufacturer or producer of final products or a provider of taxable service shall be allowed to take credit (hereinafter referred to as the CENVAT credit) of – 

 

 

https://www.cbec.gov.in/excise/cxrules/new-cenvat-rules.htm

 

so unless the factory is considered as manufacturer of final products or provider of taxable service NO CREDIT is admissible,

here the commercial production is not commenced, hence for revenue the factory may be registered but not dutiable for goods or services, 

if any credit is found availed, the same would be recovered with interest and penalty.

However, the Input Service definition says "input service" means any service,- and includes services used in relation to setting up, modernization, renovation or repairs of a factory, premises of provider of output service or an office relating to such factory or premises, inward transportation of inputs or capital goods and outward transportation upto the place of removal; Pls advice in relation to above deifiniton, cnt we take credit of services in relation to capital goods before start of commercial production?

 

ii)	used by the manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and clearance of final products upto the place of removal,

This line is also written there before the definition.

Yes so services received in relation to capital goods before start of commercial production will also fall in category of " in or in relation to manufacture of final product"