service tax on tangible goods

Service tax on renting of tangible goods like machinery has been introduced with effect from 16.05.2008. A unit who is a manufacturer under Central Excise has leased out certain capital goods to another unit and is collecting rental charges on the same. Service Tax is being paid on the rental charges collected. Provision of service requires sending of the capital goods outside. In such a case is it required to reverse the Cenvat credit availed on the capital goods since the capital goods are moving outside.

Replies (1)

I got the answer. Cenvat Credit Rules,2004 itself provides for clearance of tangible goods without reversal of cenvat credit , by a service provider.

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