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Urgent Advice on Cenvat Credit.

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Ambrish

Service

21 Points Posted on 03 June 2010

Example Situation:-

Hirachand & Sons - Onwer of Hotel

Himalaya - Hotel Chain

Himalaya has taken Hotel from Hirachand & Sons on Management Contract and Managing the Hotel as per Himalaya's policy and practices. As per contract Hirachand & Sons to pay only certain fees to Himalaya for managing the Hotel.

Can Hirachand & Sons take 100% cenvet credit on the Invoice raised by Himalaya for Professional Fees

Himalaya Charges will fall under Auxiliary Services Catergory and Hirachand & Sons can not take 100% credit

Please advice on the above urgently.

Replies (1)

Jeevesh Mehta

Advocate- Corporate Commercial & Indire

686 Points Posted on 04 June 2010

Agreement between Hirachand and Himalya wherein Himalya will be providing services ( Business Support Services or Business Auxiliary Services) to Hirachand and charges ceratin fee.

Hirachand and sons are availing services of Himalya in order to run business of hotel properly. Therefore it would be an input service for providing output services for Hirachand. Hirachand undoubtedly can avail full credit of what ever Service TAx he has paid for Input Service.

For clarifications can call me at 9811617186