Hello Friends,
Please help me about the following matter:-
We are service provider having export services which are exempt and also local services which are taxable.
Is there any rule for bifurcation of input services for claiming cenvat credit if the accounts are not maintained separately?
Can we take cenvat credit on all input services against taxable local services?
No. According to Cenvat credit rules, you have to maintain separate records for taxable services and non taxable services.
As long as the services are taxable and some are being exported there is no necessity to bifurcate the credits at all. However if you provide any taxable and exempt/ non taxable services then there is an issue.
Services provided which qualify as export of service are essentially exempt service. Since they are "EXEMPT" and NOT "EXCLUDED", it means its subject to Rule 6(3) of CENVAT Credit Rules, 2004 when it comes to availing CENVAT credit on inputs, input services and capital goods.
Finance Act, 2008 has elaborated a dual mechanism or 2 options wherein an a'see can avail CENVAT credit. So u have an option of availing either the composition scheme or the mechanism provided under Rule 6(3A)
If there is an export of service along with the local taxable service, there is no need to bifurcate the CENVAT credit. Export services are not treated as exempted services for the purpose of availment of CENVAT credit. So the credit of CENVAT is allowed in full as far as the taxable service is concerned provided there is no other exempted service other than export.
Shaswat initial support private limited
Ahmedabad
CS
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