16 December 2008
query to be asked-regarding Cenvat credit rule 6(3)
in case of a person providing exempted as well as taxable services he has three option to take the credit on input services 1. maintain the seprate account and take the cenvat credit on input services utilized for providing taxable output services. or 2.Pay 8% amount of exempted services and avail whole cenvat credit on input. or 3.pay proportionaste amount
now the question is to calculate the 8% or proportionate amount, the value of exempted services we will have to take the value of previous year.
the second question is in the current year there is no exempted services provided still in such case we will have to pay the 8% or propotioanate amount based on the previious year value to take the cenvat credit.
another query to take the cenvat credit on input there must be proper invoice but in case of rent if there is an agreement between the party still is it necessary to issue the invoive to the party
11 February 2009
To calculate the proportionate amount, any generally accepted accounting principle will fufill the requirement of the section. If in the present year, there is no exempted service and hence no such payment of amount is required. The agreement will not do to take credit of service tax on rent. You need an invoice from the landlord showing his service tax registration number, ST paid and fulfilling other requirement of service tax invoice.
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