Cenvat credit amendment
This query is : Open
17 August 2011
Whether Cenvat credit of Excise duty paid on purchase of office furniture by a Service Provider allowed to be availed?
Regards,
Ajay
Regards,
Ajay
17 August 2011
Goods such as furniture and stationary used in an office within the factory are goods used in the factory and are used in relation to the manufacturing business and hence the credit of same is allowed.- Para 3 of MF(DR) TRU(I) letter D.O.F. No. B-1/3/2011-TRU dated 25-3-2011.
17 August 2011
The assessee in the present case is service provider and not manufacture. So there is no question of factory.
Plz reply in context of service provider only.
Plz reply in context of service provider only.
17 August 2011
Service provider can't avail cenvat credit on office furniture.
17 August 2011
Thats the question itself. Why cant a service provider avail cenvat credit of office furntiure.
The clarification only restricts a manufacturer to avail its credit. The amended definition of input states 'all goods used for providing any output service'. Moreover it does not restricts such credit otherwise.
Can you give a statutory reference to your views.
Regards,
Ajay
The clarification only restricts a manufacturer to avail its credit. The amended definition of input states 'all goods used for providing any output service'. Moreover it does not restricts such credit otherwise.
Can you give a statutory reference to your views.
Regards,
Ajay
17 August 2011
"capital goods" means:-
(A)
the following goods, namely:-
(i)
all goods falling under Chapter 82, Chapter 84, Chapter 85, Chapter 90, heading No. 68.05 grinding wheels and the like, and parts thereof falling under heading 6804 of the First Schedule to the Excise Tariff Act;
(ii)
pollution control equipment;
(iii)
components, spares and accessories of the goods specified at (i) and (ii);
(iv)
moulds and dies, jigs and fixtures;
(v)
refractories and refractory materials;
(vi)
tubes and pipes and fittings thereof; and
(vii)
storage tank, used-
(1)
in the factory of the manufacturer of the final products, but does not include any equipment or
appliance used in an office; or
(2)
for providing output service;
(B)
motor vehicle registered in the name of provider of output service for providing taxable service as specified in sub-clauses (f), (n), (o), (zr), (zzp), (zzt) and (zzw) of clause (105) of section 65 of the Finance Act;
========================================
to avail the cenvat credit, your capital goods should be under above parameters, pls check , if your goods are falling within above then you can avail. its the definition of cenvat credit rules 2004 for capital goods.
(A)
the following goods, namely:-
(i)
all goods falling under Chapter 82, Chapter 84, Chapter 85, Chapter 90, heading No. 68.05 grinding wheels and the like, and parts thereof falling under heading 6804 of the First Schedule to the Excise Tariff Act;
(ii)
pollution control equipment;
(iii)
components, spares and accessories of the goods specified at (i) and (ii);
(iv)
moulds and dies, jigs and fixtures;
(v)
refractories and refractory materials;
(vi)
tubes and pipes and fittings thereof; and
(vii)
storage tank, used-
(1)
in the factory of the manufacturer of the final products, but does not include any equipment or
appliance used in an office; or
(2)
for providing output service;
(B)
motor vehicle registered in the name of provider of output service for providing taxable service as specified in sub-clauses (f), (n), (o), (zr), (zzp), (zzt) and (zzw) of clause (105) of section 65 of the Finance Act;
========================================
to avail the cenvat credit, your capital goods should be under above parameters, pls check , if your goods are falling within above then you can avail. its the definition of cenvat credit rules 2004 for capital goods.
17 August 2011
u may also refer Notification No. 3/2011-CE (NT) Dated 1/3/2011
18 August 2011
Hi,
@ Mr. U.S. Sharma - I know office furniture does not fall under the definition of Capital Goods as it is under chapter 94 of CETA. I have never considered it as Capital goods.
The question is "Why cant a pure service provider claim the Cenvat credit of duty paid on office furniture (as input) as the definition of input nowhere restricts to take its credit.
@ Mr.B.Chackrapani Warrier on 'u may also refer Notification No. 3/2011-CE (NT) Dated 1/3/2011' - This is the notification for changes in the CCR 2004 brought by the Budget 2011. But the basic question is where the said restriction it is mentioned.
The question remained the same.
@ Mr. U.S. Sharma - I know office furniture does not fall under the definition of Capital Goods as it is under chapter 94 of CETA. I have never considered it as Capital goods.
The question is "Why cant a pure service provider claim the Cenvat credit of duty paid on office furniture (as input) as the definition of input nowhere restricts to take its credit.
@ Mr.B.Chackrapani Warrier on 'u may also refer Notification No. 3/2011-CE (NT) Dated 1/3/2011' - This is the notification for changes in the CCR 2004 brought by the Budget 2011. But the basic question is where the said restriction it is mentioned.
The question remained the same.
18 August 2011
As u know, in notification 3/2011 dated 1/3/2011 only an 'inclusive definition' is given for 'input service'. Subsequent to that,as mentioned in my first above observation, a clarification letter dated 25/3/2011 has been issued allowing cenvat credit on furniture also used for certain restrictive purposes mentioned therein. As the law stands today, my observation to your query is as a corollary to the said notification and letter. However, being an inclusive definition, I feel that there is a scope for litigation till an 'exclusive definition' comes in the statute.
23 August 2011
Dear MR. B.Chackrapani Warrier
No very clear with the reply you had given in the context with due respect.
1. We are discussing on 'input' and not 'input service'
2. Neither amended defination of input nor input service depitcts an inclusive defination. Both starts with the word 'means' and later have exclusions.
Sir, I dont think there must be any litigation on availability of Cenvat Credit of Furniture used by a sole service provider. My argument in this favour is :
As per amended defiinition of input - 'input” means–
(i) ...; or (ii) ...; or (iii) …; or
(iv) all goods used for providing any output service'
For a sole service provider Furntiure is something which is directly used by the provider for provision of service without which service provision could not be possible.
Example: Consider a CA or a lawyer or Management consultant who uses his furntiture in his premise for preparation of opinion/reports etc.
Also there is no specific or generic exclusion in CCR for such input (at least I have not found). The only exclusion is for a manufacturer or manufacturer+service provider as given in the Clarification mentioned above.
So I think there is no case of litigation. I would be happy if you convince me wrong on this.
Regards,
Ajay Gumbar
No very clear with the reply you had given in the context with due respect.
1. We are discussing on 'input' and not 'input service'
2. Neither amended defination of input nor input service depitcts an inclusive defination. Both starts with the word 'means' and later have exclusions.
Sir, I dont think there must be any litigation on availability of Cenvat Credit of Furniture used by a sole service provider. My argument in this favour is :
As per amended defiinition of input - 'input” means–
(i) ...; or (ii) ...; or (iii) …; or
(iv) all goods used for providing any output service'
For a sole service provider Furntiure is something which is directly used by the provider for provision of service without which service provision could not be possible.
Example: Consider a CA or a lawyer or Management consultant who uses his furntiture in his premise for preparation of opinion/reports etc.
Also there is no specific or generic exclusion in CCR for such input (at least I have not found). The only exclusion is for a manufacturer or manufacturer+service provider as given in the Clarification mentioned above.
So I think there is no case of litigation. I would be happy if you convince me wrong on this.
Regards,
Ajay Gumbar
24 August 2011
Sir, any thoughts on the reply?
13 September 2011
Anybody with different view?
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