Input credit claim on Service tax paid to insuance co
This query is : Resolved
16 May 2009
A manufacturing unit has taken serveral Insurances like Insurance for Plant & Machinery, Building, Stock in hand, Incoming Raw Material Marine Insurance, Outgoing finished goods Marine Insurance, Insurance of car being used by management.
Now, can the company take Input credit for all these cases or it will be limited to some specific extents. Pls clarify.
Now, can the company take Input credit for all these cases or it will be limited to some specific extents. Pls clarify.
16 May 2009
All the above mentioned credits will be available to the company. However for insurance taken for car, it will avavilable if the use of the car has nexus with the manufacturing of the goods.
However all the above input services wil not be available if the company is producing exempted goods.
However all the above input services wil not be available if the company is producing exempted goods.
16 May 2009
Cars are being used by Management personnel for their home to office to & fro usage only. But as u mentioned, it shd have nexus with Manufacturin gof goods, even in case of Marine Insurance for Sale of finished goods there is no nexus and hence it shd also be disallowed then?
16 May 2009
Plz keep the query open for other experts to reply.
17 May 2009
Input credit for only those input services is available which have a direct/ indirect nexus with production of goods or rendition of services. As everybody is aware second part of input defination in Cenvat credit rules is wide.
However, it is generally accepted that input credit is available only for those input goods and services which have a relation to manufacture of goods or rendition of services.
In the present case, Input credit of Marine Insurance for incoming and outgoing raw material and Insurance for car used would be doubtfull.
However, it is generally accepted that input credit is available only for those input goods and services which have a relation to manufacture of goods or rendition of services.
In the present case, Input credit of Marine Insurance for incoming and outgoing raw material and Insurance for car used would be doubtfull.
19 May 2009
can some body clarify the issue pls?
20 May 2009
Cenvat is a beneficial bit of legislation and as far as services are concerned can be broken into 3 bits:
a. Used in relation to manufacture & clearance of excisable goods/ used for provding taxable services.
b. For services of setting up / modernising/ expansion etc.
c. Used for business.
Very wide defintion and in my view would cover all entries not specifically excluded.
In your case as long as the use of car is to come to office, it is a business related exp and therefore in my view the same wouldbe available.
a. Used in relation to manufacture & clearance of excisable goods/ used for provding taxable services.
b. For services of setting up / modernising/ expansion etc.
c. Used for business.
Very wide defintion and in my view would cover all entries not specifically excluded.
In your case as long as the use of car is to come to office, it is a business related exp and therefore in my view the same wouldbe available.
20 May 2009
Any other views from Experts!
21 May 2009
there is no such bar in laws and there is a lot of cases in which credit allowed by the tribunal towards mobile phone so i agree with Mr. Madhukar.
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