CHINTANKUMAR PRAVINCHANDRA SHA (proprietor) (32 Points)
18 May 2012One of my client is doing job work of zinc and electroless platting. They are charging Vat on 60% and Service Tax on 40% Labour Amount.
Some of customers of that client are excise paying. So they are asking not to charge service tax on their Bills.
Now my querry is that whether he can get the Cenvat Credit on Purhcase of Chemicals etc.
SO please reply.
Thanks in advance
Chintan
Prateek Agarwal
(Sr. Executive - Finance & Accounts)
(1732 Points)
Replied 18 May 2012
Payment of service tax can be claimed against output of excise duty.
If you are not charging service tax on your bills in case of sale, then you cannot claim cenvat credit of the service tax paid on purchase of chemicals. Although, you can take credit of VAT paid on chemicals purchased in case you bill with VAT amount
Regards
Prateek
OFFICESELVA
(Service)
(515 Points)
Replied 18 May 2012
If it is possible they can keep seperate records for taxable and exempted services. If not possible they have reverse as per rule 6(3) of cenvat credit rules...
CAclubindia
