Avail 20% discount on updated CA lectures for Dec 21 .Use Code RESULT20 !! Call : 088803-20003

ICICI

Share on Facebook

Share on Twitter

Share on LinkedIn

Share on Email

Share More

Input Services Credit

LinkedIn


Court :
Tribunal

Brief :
Exempted and dutiable services – common input services - Not maintaining separate records cannot be a ground for denying Input Service Credit in respect of service tax paid on services referred in Rule 6(5) of CCRs, 2004 : Tribunal

Citation :

Exempted and dutiable services – common input services - Not maintaining separate records cannot be a ground for denying Input Service Credit in respect of service tax paid on services referred in Rule 6(5) of CCRs, 2004 : Tribunal By TIOL News Service MUMBAI, MAR 24, 2008 : RULE 6 of the CCR, 2004 cannot but continue to hog the limelight. Sub-Rule 6(5) of the Cenvat Credit Rules, 2004 reads thus – (5) Notwithstanding anything contained in sub-rules (1), (2) and (3), credit of the whole of service tax paid on taxable service as specified in sub-clause (g), (p), (q), (r), (v), (w), (za), (zm), (zp), (zy), (zzd), (zzg), (zzh), (zzi), (zzk), (zzq) and (zzr) of clause (105) of section 65 of the Finance Act shall be allowed unless such service is used exclusively in or in relation to the manufacture of exempted goods or providing exempted services. It is the submission of the Appellant Revenue that the respondents have not maintained separate records for utilization of the credit taken and the services received by them for exempted and for the non-exempted categories; that the provisions of Rule 6(3)(c) will be applicable and even if the credit has been allowed under rule 6(5), the respondent is entitled to utilize only 20% of the amount of credit that is available to him as a credit. The Tribunal while holding that the Commissioner(Appeals) had correctly appreciated the legal position observed – Rule 6(5) starts with a non-obstante clause “notwithstanding”, which would indicate that the provisions of Rule 6(3) are not applicable for the provisions of Rule 6(5) of Cenvat Credit Rules, 2004. If it is undisputed that the service tax credit availed is on the services as mentioned in Rule 6(5), the credit of the entire/whole amount of service tax has to be allowed to the respondent. Attempt of SDR to distinguish the word “taking” and “allowed” of the credit cannot be appreciated inasmuch as if an assessee takes eligible credit, he should be allowed to utilize the same & there could no reason for allowing the credit but not permitting the utilization in the sense the same would go against the substantive legislation of the Cenvat Credit Rules, 2004. In fine, the appeal filed by the revenue was rejected
 

CA Praveen Chopra
on 24 March 2008
Published in Service Tax
Views :
Report Abuse

LinkedIn







Trending Tags