Levy of service charge

service charge is the fees additionally or specifically charged by the service provider for providing the service, nd service tax is the tax imposed by govt.

Service charge is an expense whereas for service tax, input can be taken, provided its an eligible input service.

If a Y uses some services as input services from X and He charged service charge in his bill to the service receiver Y.

then, whether Y is eligible for credit for his out put service (taxable) for the same

Y cannot take credit of service charges, this amount is the income of X.

Y can take credit of service tax charged on the bill while keeping other points related to service tax in concern.