Our client is a telecom company. It has bought capital goods from outside india and has paid customs duty on the same. He has availed cenvat credit of CVD (Additional Duty) and adjusted the amount from service tax payable. My query is if the capital goods are used as lines (telecom lines) between delhi and jammu whether cenvat credit for the whole amount will be available or not? As the lines are used both in a taxable territory and non- taxable territory.
Restrictions on Credit Availment
CENVAT credit shall not be allowed on such quantity of inputs or input services which is used in the manufacture of exempted goods or exempted services except in the manner specified. [click here for Obligations of MFP and OSP].
No CENVAT credit shall be allowed on CG which are used exclusively in the manufacture of exempted goods or in providing exempted services, other than the FP which are exempt under SSI Exemption Scheme.
CENVAT credit on CG shall not be allowed in respect of that part of value of CG which represents the amount of SDT on such CG which the manufacturer or OSP claims as Depreciation u/s. 32 of Income-tax Act, 1961.
In cases where, under a Notification abatements have been claimed by specified OSP, CENVAT credit of duties paid on inputs /capital goods or Service Tax paid on Input Services cannot be availed.
In cases where an OSP opts for Works Contract Composition Scheme, CENVAT Credit of duties paid on inputs, cannot be availed
Naveen Fintech Pvt Ltd
Kolkata
CA Inter
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Gupta Sachdeva & Co. Chartered Accountants
New Delhi
CA Final
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