I am getting commission on selling chemicals. I am having godown where we store these chemicals. We are paying godown rent and service tax to the landlord who gives rent invoice with service tax.
1. Can we take credit of this service tax against service tax we pay on commission received?
2. if we can then in service tax return in which category we will show? .ie a) on inputs b) on input service received directly c) as received from Input Service Distributor of d) others
regards
Sanjeev Nrain
You can claim input service tax only on output service tax.
suppose you paid (input)Rs.1000 as service tax and recd (output) Rs.1500 as service tax , then you need to pay only the difference i.e Rs.500/-
You can show as - Input service received directly.
Dear Sanjeev,
As per definition of Input Services "storage upto the place of removal" is covered.
The Phrase 'Place of Removal' has not been defined under CENVAT Credit Rules. It is defined under Section 4 of Central Excise Act,1944. It defined as:
"(c) “place of removal” means -
(i) a factory or any other place or premises of production or manufacture of the excisable goods;
(ii) a warehouse or any other place or premises wherein the excisable goods have been permitted to be deposited without [payment of duty;]
[(iii) a depot, premises of a consignment agent or any other place or premises from where the excisable goods are to be sold after their clearance from the factory;]
from where such goods are removed"
Therefore, in case you are a consignment agent and risk is still lying with owner. you may take CENVAT Credit.
However, in case risk of goods has been transferred to you. This activity will be treated as trading activity and you will not be able to get CENVAT Credit.
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