Service-tax Set-off on Recharge of Prepaid Mobile

I am an CA Article and doing the internal audit of one of the private company. On doing the same, i have come across one issue for which I would like to take your opinion.

The issue is these company is not taking into account the amount of service tax for the prepaid mobile recharge for set-off, however there is clearly mentioned the service tax amount for the same(for ex. AIRTEL Co.). So my questions for the same are..


1. Whether they should take the service tax amount into consideration?

2. If yes, the service provider for recharge does not mention the service tax no. on the recharge coupon, how the company would get it for claiming set-off for the same?

Replies (2)
Hi Niraj, Service Tax Credit can be taken on the basis of valid documents. An invoice raised by the input service provider containing the particulars prescribed under rule 4A of the Service Tax Credit Rules is a valid and proper document. Prepaid Mobile Recharge Voucherdoes not contain other prescribed information like name and address of service receiver, Sl. No. of the voucher. Some service providers do not even mention the service tax regdn. no., catagory of service. It is also not possible to satisfy that the service has been used in or in relation to provision of taxable output service by the service provider. Service Tax credit is not available on prepaid mobile recharge voucher - in my opinion.
Pls refer to the reply posted to your query. The phrase "rule 4A of the Service Tax Credit Rules" be read as "rule 4A of the Service Tax Rules".

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