Input credit on candidate verification

Queries 459 views 3 replies

Pl clarify the following query relating to Service tax Input credit availment pertaining to candidate verification charges.

Case

Mr. A is the service provider who is involved in candidates profile verification before being recruited by the company B. Mr B appoints A regulary for verifying the candidates authenticity for which A charges professional charges along with serivce tax.

Query

a) Can we avail service tax credit on the above? If so can we avail on the entire amount?

b) There is probability that all candidates verified will not turn up for employment, if this is the case can we take credit on the amount paid for such verification since going by the definition of Input credit it states that 'services used by manufacturer directly or indirectly or in relation manufacture of final products and clearance of final products’ alone are eligible for availment of input credit'

c) can we classify the services under Manpower recruitment and claim entire credit as the services include antecedent verification and nothing specific relating to credit for employees not joined is given?

 

 

Replies (3)

you should treat Mr. A as consultant for candidate verification and service tax paid on his profesional charges can be used as a input service which make you in position  to utilized input credit of service tax paid on it.

 we cant treate them as as manpower supply because his service only to verify the candidate for the suitability of job not supply labour.

May this will help your query and kindly correct me if iam wrong.

 

Originally posted by : CA JITENDER CHAUHAN
you should treat Mr. A as consultant for candidate verification and service tax paid on his profesional charges can be used as a input service which make you in position  to utilized input credit of service tax paid on it.

 we cant treate them as as manpower supply because his service only to verify the candidate for the suitability of job not supply labour.

May this will help your query and kindly correct me if iam wrong.

 

Agreed with point no.1 but what about the charges paid for candidates who have nt turned up for employement. can we avail credit considering the input definition.

 

Dear Shriram,

You can avail the Input service tax credit paid on professional fees for employees profile verification service (Input service) even though the employees did not turned up for employement.

“Input service” means any service, -

(i) used by a provider of taxable service for providing an output service;

If the said mentioned services are used for providing output service (I belive it is) it shall be eligible for CENVAT.

 

Regards

Dharmesh

 

 


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