Quantum of input credit on service tax

If peson is registered than 100% credit for input service is available.

Credit is available on input services across goods & services since introduction of CENVAT Credit Rules, 2004. But where you are providing taxable as well as exempted services, Rule 6 of the above mentioned Rules would be applicable & credit would be availabe accordingly.

But in above case also, full credit of Specified Services would be applicable.

"6 (5) Notwithstanding anything contained in sub-rules (1), (2) and (3), credit of the whole of service tax paid on taxable service as specified in sub-clause (g), (p), (q), (r), (v), (w), (za), (zm), (zp), (zy), (zzd), (zzg), (zzh), (zzi), (zzk), (zzq) and (zzr) of clause (105) of section 65 of the Finance Act shall be allowed unless such service is used exclusively in or in relation to the manufacture of exempted goods or providing exempted services."

If any of the above services relate to exempted/non-taxable service or production of non-dutiable goods, only proprotionate credit is available. P. note that Rule 6(5) no longer exists.

Thanks Mr. Nair,

I inadvertently ignored the amendments brought to CENVAT Credit Rules, 2004 through Notification No.3/2011-CE(NT) dated 01.03.2011, wherein the above sub-rule 6(5) has been omitted. Thanks again.