Service Tax Input Credit

Dear All,

          Please guide me on my following query:-

we are pvt ltd co.and ragistered under vat cst and service tax. recently we purchased one drawing software which cost of rs 2,91,000 including taxes. due to changes in taxation the software also attaract excise duty.heance we are not able to take modvat credit as we have not registerd under excise.the seller party has given us excise invoice.my question is can we get this modvat as a service tax input credit. please suggest because the amount of excise duty is very large.

thanks in advance

with regards,

sagar

Replies (2)

Now it is allowed to merge Cenvat of Excise and Service tax to make payment of Excise or Service Tax. So, you can take the credit of the same for payment of service tax.

It is called cross utilisation or cross sectoral credit.  After the year 2004, the excise duty amount including capital goods credit can be utilised for service tax output tax.  Hence it is permissable under the Service tax Act.  Kindly send an official letter to the superintendent of service tax that  you will be adjusting the CENVAT credit on the said input against service tax payment, provided the input is in relation to output taxable service.  Get the dated acknowledgement from the department. 

 

rengaraj.r.k

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