Cenvat credit

This query is : Resolved

Azim (Querist)
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09 February 2014 AB pvt ltd company is paying a Mobile Bills of an employee/Diretor but the Expense is bourne by the Employee. Company is just making payment on behalf of him. Telephone connection is used for Business purposes. Company on making the payment of bills has taken Credit of Service Tax charged on the bill. Whether such credit is allowed to be taken???/

Would your answer be different if the connection is in the name of Company, but expense is still bourne by empolyee/director?????

Neljo Davis ACA

Neljo Davis ACA (Expert)
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20 February 2014 For taking credit of the service tax charged on the bill, the liability for expense should be paid by the company and services should be used by the company. There is no logic in claiming credit on the liability paid as an agent of the employee.