Credit of service tax cannot be denied on the ground of 'no nexus with output services'

Last updated: 13 December 2022
Quick Summary
The CESTAT has ruled that businesses cannot be denied a refund of service tax simply because the input services used do not have a direct link to their output services. This decision clarifies that amended rules, particularly Rule 5 of the Cenvat Credit Rules 2004, allow for such refunds, especially for service exporters. The tribunal emphasised that the authorities misinterpreted the rules by insisting on a 'nexus' which is no longer a mandatory requirement for claiming credit.

Court :
CESTAT, Mumbai

Brief :
The Central, Excise and Service Tax Appellate Tribunal, Mumbai ("the CESTAT") in the case of M/s. Sequoia Capital India Advisors Pvt. Ltd. v. Commissioner of CGST & Central Excise (Service Tax Appeal No. 87174 of 2019) dated December 01, 2022 held that the refund of service tax cannot be denied on the ground of input/input services has no nexus with output services.

Citation :
Service Tax Appeal No. 87174 of 2019

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