Cenvat Credit

This query is : Resolved

DEEPAK GOYAL (Querist)
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10 October 2009 we are registered in Service Tax and Central Excise Both. We pay service tax on GTA Services used by us after taking 75% abatement. i have following questions:-

1. we Charge from our customers 10.3% service tax on services given by us, can we take modvat credit of service tax paid by us on GTA services after taking 75% abatement?

OR

2. Can we take modvat credit of Service tax paid on GTA Services after taking abatement of 75% in Central Excise?

3. Can we adjust modvat credit of telephone and mobile bills i.e. 10.3% in Service tax payable on GTA Services i.e. 2.575%?
Please clearify me in detail

Thanks

Shyam Lal Naik

Shyam Lal Naik (Expert)
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10 October 2009 Both the services are input service for the purpose of Cenvat Credit Rules.

The Cenvat Credit can be utilised for discharge of Service Tax as well as Excise duty.

Please note that, you have to substantiate that these services are used for providing output servics and / or in relation to manufacture etc.

Hon'ble Supreme Court has recently observed that Cenvat Credit Rules, 2004 is poorly drafted and prone to litigation. Hence, a straight Yes or No answer is not possible, in the absence of complete information.