26 November 2011
Rule 2 (l) of CENVAT Credit Rules, 2004 after amendment by FA 2011: “input service” means any service, - (i) used by a provider of taxable service for providing an output service; or (ii) used by a manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and clearance of final products upto the place of removal,
and includes services used in relation to modernisation, renovation or repairs of a factory, premises of provider of output service or an office relating to such factory or premises,
advertisement or sales promotion, market research,
storage upto the place of removal,
procurement of inputs,
accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating, share registry, security, business exhibition, legal services,
inward transportation of inputs or capital goods and outward transportation upto the place of removal;
but excludes services,- (A) specified in sub-clauses (p), (zn), (zzl), (zzm), (zzq), (zzzh) and (zzzza) of clause (105) of section 65 of the Finance Act (hereinafter referred as specified services), in so far as they are used for- (a) construction of a building or a civil structure or a part thereof; or (b) laying of foundation or making of structures for support of capital goods,except for the provision of one or more of the specified services; or (B) specified in sub-clauses (d), (o), (zo) and (zzzzj) of clause (105) of section 65 of the Finance Act, in so far as they relate to a motor vehicle except when used for the provision of taxable services for which the credit on motor vehicle is available as capital goods; or (C) such as those provided in relation to outdoor catering, beauty treatment, health services, cosmetic and plastic surgery, membership of a club, health and fitness centre, life insurance, health insurance and travel benefits extended to employees on vacation such as Leave or Home Travel Concession, when such services are used primarily for personal use or consumption of any employee;‟;
ANALYSIS OF ABOVE AMENDMENT List of Services Specified Under Rule 2 (l)(ii)(A) 1. Port Services [65 (105) (zn)] 2. Port Services in other port [65(105)(zzl)] 3. Air Port Services [65(105)(zzm)] 4. Commercial or Industrial Construction Services [65(105)(zzq)] 5. Construction of Complex Services [65(105)(zzzh)] 6. Works Contract Services [65(105)(zzzza)] 7. Architect’s Services [65 (105) (p)] If the above services are used for the (a) construction of a building or a civil structure or a part thereof; or (b) laying of foundation or making of structures for support of capital goods then these services shall not be considered as input services and accordingly CENVAT credit shall not be allowed. In other words, if the above services are used for provision of services other than construction etc in clause (a) & (b) then they shall be included in the definition of input services and accordingly CENVAT credit shall be taken.
List of Services Specified Under Rule 2 (l)(ii)(B) 1. General Insurance Business Services[65 (105) (d)] 2. Rent-a-Cab Scheme Operator Services [65(105)(o)] 3. Authorised Service Station Services [65(105)(zo)] 4. Supply of Tangible Goods Services [65(105)(zzzzj)] If the above services are used in respect of motor vehicle by any service provider then they shall not be included in the definition of input services and accordingly CENVAT credit shall not be taken. However, if the above services are used by the following service provider in respect of motor vehicle then they shall be included in the definition of input service and accordingly CENVAT credit shall be taken: 1. Courier AgencyServices [65 (105) (f)] 2. Tour OperatorServices [65(105)(n)] 3. Rent-a-Cab Scheme Operator Services [65(105)(o)] 4. Cargo Handling Agency Services [65(105)(zr)] 5. Goods Transport Agency Services [65(105)(zzp)] 6. Outdoor Caterer Services [65(105)(zzt)] 7. Panadal or Shamiana Contractor Services [65 (105) (zzw)]
Read the above provision and analysis and apply. I hope ur all queries will be resolved now.
If u r satisfied by my reply then say thanks by clicking on "THANK USER".
CAclubindia
