Cenvat credit on retainership bill

This query is : Resolved

Akhil (Querist)
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14 February 2012 My query is regarding service tax charged by the retainers in their bill.I want to know whether we can take credit on the same if they have submitted bill as "Professional consultancy charges" or "Professional Engineering consultancy charges" were as in their appointment letter they have been mentioned as retainers by the HR .Please advice

PUNEET GOYAL

PUNEET GOYAL (Expert)
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14 February 2012 According to me when a person is appointed on retainer ship in that case he provides services in professional capacity and not as employee of the compnay. Accordingly his services are taxable under the service tax act as per proper classification.

Akhil

Akhil (Querist)
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15 February 2012 Thanks puneet , I have seen in some companies cenvat credit is availed but in some it has not been availed even though they are charging Service tax in their bills ,as we know if retainer is appointed for some project or work his services are directly related so is their any clarity regarding head or instance

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PUNEET GOYAL

PUNEET GOYAL (Expert)
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15 February 2012 Classification of services provided on retainer ship basis depends on the type of services provided. Accordingly we will check that whether it satisfy the definition of input services as per Rule 2 (l) of CENVAT credit rules, 2004. if yes then we can take cenvat credit.