We provide Manpower placement in Delhi to compnies based allover India.We chagre service tax to all our clients.
I just want to know do we need to pay the whole amount charged as a service tax OR We need to deduct the service tax paid by us on different services avialed by us. E.g.Phone bills,resume Serices(Naukri.com) Etc.
What all is covered under Cenvat?
Earlier, the word "activities related to business" was there in the "input service" defintion. Recently from 01.04.2011, govt withdrawn the above words. Hence if you are able to correlate the input services to the output service, you can straight away take the credit and can adjust in your final payment. I hope, you may not get any problem in availing "naukri" services. But Telephone, courier service may not abe acceptable. The following circular may help you in this regard.
943/04/2011-CX, Dated : April 29, 2011
CENVAT CREDIT IS ALLOWED ONLY FOR THOSE SERVICES WHICH ARE USED TO PROVIDE OUTPUT TAXABLE SERVICES.
CENVAT CREDIT IS ALLOWED ONLY FOR THOSE SERVICES WHICH ARE USED TO PROVIDE OUTPUT TAXABLE SERVICES.
You can take the service tax input of above services as these not covered under any restrictions as per above notification
If you could establish a nexus between input & output services as per your claim, credit will be allowed. Service Tax paid on telephone service & for Resume service have a nexus with output services provided by you, hence credit will be allowed. With amendment in the definition of Input service vide Notification No.3/2011-CE (N.T.) dated 01.03.2011, only some specific exclusions have been introduced. In principal no major part has been deleted from the old definition, but some specific exclusions have been specified to make the definition more clear.
Please refer to the new definition at Para 2(v) of the file attached below:
Saini Pati Shah & Co LLP, Chartered Accountants
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