Service Tax Credit against rent.

Hi Abhishek,

Good question. When we are asking for a CENVAT Credit claim in Indirect Tax or we ask for allowance of Expenditure from Income in case of Direct Tax, we are required to prove the Nexus. Nexus stands for relationship of Income with Expenditure.

In your case, you need to prove to the department that for earning income of rent you incurred expenditure of telephone and frieght or so and so expenses. If they are incurred for your manufacturing business then undoubtedly CENVAT Credit of the same can not be claimed against your rent income.

Hope I justified my point.

Warm Regards.

That what i also thought, thanks GAUTAM

Normally nexus is preferable for credit but in my view not essential if the scheme as a whole is taken.

It maybe important to know that there is a concept of - one to one corelation- not applicable to cenvat credit. The decisions in central excise maybe perused to get a good idea on this.

go with Mr Madhukar opinion the important word is one to one correlation or input output correlation has been done away with

thanks gautam..