Excess Amount paid

This query is : Resolved

Malcome M Bandya (Querist)
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08 October 2009 Dear

We have paid Excess Amount in Service tax Category - Business Auxiliary Services. Can we adjust this excess amount in the another Category - i.e. Maintenance or Repair Service or any other category for future payments.

Please advise.

Regards,

Malcome Bandya.

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Guest (Expert)

08 October 2009 No inter sectoral (i.e manufacturing and services and vice-versa) credit is allowed. The position has been clarified vide circular no. 56/5/2003 dated April 25, 2003.
If input and output services do not fall in same category, full input service tax credit will be available only if separate records of input services used in relation to output taxable services are maintained.
If separate records are not maintained, then credit of input tax will be available subject to ceiling of 35% tax payable on output services. Even here, the input services should have been used in relation to output service.