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Input service credit

Service Tax (Legacy) 595 views 5 replies

Can manufacturing co take credit of a) Sevice Tax on Hotel Bill and b) Service Tax on Fare Ticket

Please give reference of notification or rule or section..

Replies (5)

Refer to the definition of Input Service under rule 2(l) of CENVAT Credit Rules, 2004

Hotel Bill :  For stay of employee - Indirectly in relation to manufacture of final product : allowed

                  or can be related with Market Survey

Fare Ticket : If for purpose of business : allowed : Procurement of input or indirectly in relation to mfr of final product

As per Cenvat credit Rules 2013

Services for personal use or consumption of employees specifically excluded under clause (C). Services such as outdoor catering, beauty treatment, health services, cosmetic and plastic surgery, membership of a club, health and fitness centre, life insurance, health insurance and travel benefits extended to employees on vacation such as Leave or Home Travel Concession have been specifically excluded from the definition of input services.

However, this exclusion is only when such services are used primarily for personal use or consumption of any employee. Like mobile phone to employee for business purpose is allowed. Club membership fees of director who is not employee should be eligible. Corporate club membership [ without any name of employee] shall be eligible .

It also be note with the recent Cenvat credit rules . All Credit related Post Production expect for adverstiment has been disallowed.

So in this regards it necessary for Company to show nexus or relation of such transaction related such credit is  a directly attributable to Manufacting or not.

 

@ Santosh, these expenses are not personal used for employees, it's for a marketings and survey.

@ Santosh, these expenses are not personal used for employees, it's for a marketings and survey.

Hi Lalit ,

Even though the expenses is incurred for the purposes of Company. As per the Info given by it being manfacturing co & the expenses is as per my knowledege is related to post production , Such input credit cannot be taken by company. Practially department is no allowing such Service Credit for the purposes of Input.


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