Cenvat credit on hotel bills

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Sir, We are a manufacturing concern. Can we take cenvat credit of service tax paid on hotel bills used by employees for official purpose?
Replies (10)
No, you can't ; as it is not related to your manufacturing activities.

I think you can take credit as it is for official purposes.

Originally posted by : Ajay Aggarwal
Sir,

We are a manufacturing concern. Can we take cenvat credit of service tax paid on hotel bills used by employees for official purpose?

if such service is qualified as input service, i.e the stay in hotel was in direct relation to providing taxable services, then only its admissible, official work is not an taxable event, 

The stay is done by marketing people for enhancing sales of the company or by higher management for business promotion

Stay should be in connection with the manufacturing activity; Marketing cannot be an output serivce.

you will not be able take cenvat credit

However Input services definition includes services used in relation to advertisement or sales promotion, market research, activities relating to business. Will not the stay of marketing personal fall under above?

Get it clear Sir, whatever the activities related to your production (even up keep & maintenance of machinery) are eligible for CENVAT Credit

So you mean service tax input on hotel bills, air tickets extra is not available?

As per below given definition of input services the credit can be taken under the market research etc. but it would be disputable.

 

 

(l) "input service" means any service,-

(i) used by a provider of taxable service for providing an output service; or

(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 clause has been amended vide Notification 10/2008 C.E. (N.T.) - dated 01-03-2008)

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, advertisement or sales promotion, market research, storage upto the place of removal, procurement of inputs, activities relating to business, such as accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating, share registry, and security, inward transportation of inputs or capital goods and outward transportation upto the place of removal;

Dear All

We provide output services to client. 

can we avail cenvat credit for employees stay in hotel during work for client in some other state ?

Further, can we avail cenvat credit on bill in the name of director but company's name written as: ABC director, C/O XYZ pvt. limited ?


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