Manoj (Asst. Manager Internal Audit) (38 Points)
13 June 2012Dear Sir,
We are a manufacturing company who are also exporting our goods. We have availed Packing Credit Foreign Currency loan from bank. Bank has charged service tax on prcessing this loan.
My Query is : Can we take service tax input credit on service tax charged by the bank ???
Regards,
Manoj Shah
Devendra
(Chartered Accountant)
(4775 Points)
Replied 13 June 2012
Service tax input can be availed.
Regards,
Devendra Kulkarni
Manoj
(Asst. Manager Internal Audit)
(38 Points)
Replied 14 June 2012
Dear Devendra,
Thanks for your feedback.
We are exporting our goods which are exempted from Excise, so in this case can we avail input credit for exempted services ??? If you have any write up / notification no/ or clause in ST act, please share the same which can substantiate that we can take Input Credit. It would be a great hel;p to me.
Regards,
Manoj Shah
Prateek Agarwal
(Sr. Executive - Finance & Accounts)
(1732 Points)
Replied 14 June 2012
Yes you can take input of service tax. Also since you are exporting the materials, you can also claim refund of the service tax paid.
Check out Sec 11B of the Excise Act / Service Tax refund procedure to get hold of the same.
MAHESH GARG
(AUDIT EXECUTIVE)
(334 Points)
Replied 14 June 2012
As per Rule 5 of Cenvat Credit rules, 2004
Where any input or input service is:
-used in the manufacture of Final Product which is cleared for export under Bond / Letter of Undertaking
-used in the intermediate product cleared for export
the cenvat credit in respect of the input or input service so used shall be allowed to be utilized by the manufacturer towards payment of duty of excise on any final product
AND where such adjustment is not possible the manufacturer shall be allowed refund of such amount.
MAHESH GARG
(AUDIT EXECUTIVE)
(334 Points)
Replied 14 June 2012
But also if you are manufacturer of Dutiable as well as Exempted goods using common input / input services then you will have to follow rule 6(2) or 6(3) of Cenvat Credit rules, 2004
Renuka
(CA FINAL)
(317 Points)
Replied 14 June 2012
Hi Manoj,
You have three options for this:
Option-I Refund under Notification 12/2005 dated 19.04.2005
Under this notification rebate is granted of the Central Excise paid on inputs and service tax and cess paid on input services used in the providing the taxable services exported to any country other than Nepal and Bhutan, subject to certain conditions.
Option-II Refund under notification 11/2005 dated 19.04.2005
Under this Notification No.11/2005-ST dated 19.04.2005 as amended by Notification No.21/2007-ST, dated 12.05.2007, rebate of the service tax and cess paid on taxable services exported to any other country other than Nepal and Bhutan is given subject to certain conditions.
Option-III Rule 5 of Cenvat Credit Rules, 2004(Refund of Cenvat Credit):
To avail benefit under this rule the following conditions has to be satisfied.
1.The output service has to be exported in terms of Export of Service Rules,2005.
2.Refund shall be claimed only once in a quarter.
3.The applications shall be filed within One Year from the relevant date.
4. Refund is allowed only incase where the utilisation of CENVAT Credit is not possible.
Regards,
Renuka
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