CENVAT for input services

This query is : Resolved

Guest

Guest (Querist)

04 September 2008 Dear Experts

We are in Manufacturer, Trader & Service provider for the Textile Products having different locations (Manufacturing and Warehaouses);

And we have to pay service tax on commission income which is generated from the business of providing marketing service in relation to the textile product.

Now I am confused regarding the service tax CENVAT provisions, so can you help me about the same?

I have read service tax provisions and found doubts in following points;

1. Definition of Input Services says that the ….Input services are eligible when they are used “FOR” providing the output services….
2. and in later part the definition also says that ….and also includes…. “Services relating to activities relating to business”……
3. Services “need not be received” in the premises from where the output services provided.
4. Also there is a provision for ISD i.e. “input service distributor”.

I have following questions looking to the above provisions.

1. Whether all the services which we receive are eligible input services? Please also clarify the non-eligible services.
2. Whether input services received at the location different from the Location which is registered as output service provider, are eligible input service or not?
3. Whether in case of above que. 2 we can you the facility of ISD or it is not required at all?

Thanks a lot
Rohit Boraniya
Rohitboraniya@gmail.com

SIMA

SIMA (Expert)
Follow

04 September 2008 hi rohit
at first let me clear you one and important thing that any input service received by your factory or your office till your product is produced will be eligible for cenvat credit.

input service can be directly related to manufacturing activity or can be related to any other activity like accounts and finance e.x audit fee,telephone ex of office,courier service,printing charges,travelling charges etc but all these service should be incurred before your products are produced
that means marketing ex will not be covered.

now all these input bills should be in the address of your factory whereever is the service received anf your service tax registration number should be for your factory.
if bills are coming in the address of h.o then you should take a isd reg no. for office also.

then all these input service will be taken in isd and then by the specified method od isd as per service tax rules will be distributed to your factory and then original bills will be sent to factory and cenvat credit will be taken on that date onle

again i would like to inform you that input service credit can be utilised at any time it has no limitation period

SIMA

SIMA (Expert)
Follow

04 September 2008 and also in case your speciofied location is not registered for service tax then you should take the bill in address of that location which is registered for service tax

but yes h.o services cannot be taken at factory address
but factory service can be taken at h.o address and then it will be distributed throgh isd
but better is you should take it in the adress of factory then it will be directly credited to factory in e.r 1 register it will need not be routed throgh isd

Upgrade to CAclubindia Pro. Subscribe Now!

Guest

Guest (Querist)

06 September 2008 Ya you are right but whether all the services which are received at the location for which we are having registration is eligible for cenvat credit or not.??

Thanks

Guest

Guest (Querist)

24 September 2008 thanks