29 June 2010
I have paid service tax to bank for discounting letter of Credit and i Have claimed the same amount against excise duty payable..The department has refused to admit the claim on the basis that it is not input service tax.. plz help me
29 June 2010
My view, the department is correct. Since the LC are finance purpose taken and paying the charges for the same, In this no input for manufacturing input
29 June 2010
The term input service has been held to be wide in scope in coca cola and other cases. Services used for activities of business like accounting, auditing, financing .. .. are also input services. Hence there is no justification to restrict the meaning to manufacturing activity only.
Full credit of tax paid under "Banking & Financial Services" are available even if partly used for non taxable manufacture.
Financing, being an activity relating to business, qualifies as input service.
In my view, the department's view is not legal and proper.
CAclubindia
