Units earning income from Trading Activities (Purchase and Sales) as well as commission Income are allowed to utilise cenvat credit in respect of Telephone Expenses and Audit fees on prorata basis by the Service tax Department . Is it correct?
CA PRAMOD SARAOGI (Chartered Accountant) (1113 Points)
05 December 2009Units earning income from Trading Activities (Purchase and Sales) as well as commission Income are allowed to utilise cenvat credit in respect of Telephone Expenses and Audit fees on prorata basis by the Service tax Department . Is it correct?
Shyam Lal Naik
(Service)
(6156 Points)
Replied 05 December 2009
Common inputs/services refers to inputs/services used to provide and / or manufacture taxable services/product as well as exempt services/product.
Trading activity is neither production nor service.
Appropriation is not possible, in my view.
Ansari
(ca final)
(444 Points)
Replied 06 December 2009
| Originally posted by :Shyam Lal Naik | ||
| " | Common inputs/services refers to inputs/services used to provide and / or manufacture taxable services/product as well as exempt services/product. Trading activity is neither production nor service. Appropriation is not possible, in my view. |
" |
Madhukar N Hiregange
(Chartered Accountant)
(38934 Points)
Replied 09 December 2009
Since there is no express denial for input services used in trading activity we can legally safeguard ourselves that there is no need of bifurcation and the whole credit is available.
An alternative for safety could be the bifurcate the same on basis of costing principles and not to avail the credit on the trading activities.
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