CENVAT Credit on Canteen & transport services
This query is : Resolved
30 November 2009
Whther service tax credit on canteen and transport bills can be taken.
30 November 2009
Yes, you can take input service tax credit paid on canteen and transport bills
30 November 2009
I have gone through in one case where stand was taken that if company is getting deduction from employee for transport and canteen, in such case CENVAT credit cannot be availed??
01 December 2009
I have gone through in one case where stand was taken that if company is getting deduction from employee for transport and canteen, in such case CENVAT credit cannot be availed??
19 July 2024
CENVAT credit eligibility for services like canteen and transport can be complex and depends on specific circumstances. Here’s a breakdown of the general rules and considerations:
### Canteen Services:
1. **Canteen Services to Employees**:
- Canteen services provided to employees are typically considered as services for employee welfare and are not eligible for CENVAT credit. This is because such services are not directly used in providing output services or manufacturing activities.
2. **Exceptions**:
- If the canteen services are provided to employees and also to contractors or outsiders, CENVAT credit can be availed for the portion used for contractors or outsiders.
- If the canteen services are provided in a factory or office premises and are available to all employees (including those involved in providing taxable services or manufacturing goods), then CENVAT credit might be eligible.
### Transport Services:
1. **Transport Services for Employees**:
- Transport services provided to employees for commuting between home and office are generally considered as services for employee welfare and are not eligible for CENVAT credit.
2. **Exceptions**:
- Transport services that are used for business purposes, such as transporting goods, might be eligible for CENVAT credit.
- Transport services provided to employees that are incidental to the business activities (e.g., transportation of employees for work-related events or site visits) may also be eligible for CENVAT credit.
### Deduction from Employee Salary:
- If deductions are made from employee salaries for canteen or transport services, it typically indicates that these services are provided as a part of employee welfare. In such cases, CENVAT credit is usually not available because the services are not directly used in the provision of output services or in manufacturing activities.
### Conclusion:
- **Canteen Services**: Generally, CENVAT credit cannot be availed for canteen services provided solely to employees unless there is a provision for other stakeholders or it is provided in a manner that supports business activities.
- **Transport Services**: CENVAT credit can be availed for transport services if they are used for business purposes or are incidental to business activities.
To determine the exact eligibility for CENVAT credit in your specific case, it’s recommended to review the nature of the services provided, the documentation supporting their use in business activities, and consult with a tax advisor who can provide tailored advice based on your company’s circumstances and applicable laws.
### Canteen Services:
1. **Canteen Services to Employees**:
- Canteen services provided to employees are typically considered as services for employee welfare and are not eligible for CENVAT credit. This is because such services are not directly used in providing output services or manufacturing activities.
2. **Exceptions**:
- If the canteen services are provided to employees and also to contractors or outsiders, CENVAT credit can be availed for the portion used for contractors or outsiders.
- If the canteen services are provided in a factory or office premises and are available to all employees (including those involved in providing taxable services or manufacturing goods), then CENVAT credit might be eligible.
### Transport Services:
1. **Transport Services for Employees**:
- Transport services provided to employees for commuting between home and office are generally considered as services for employee welfare and are not eligible for CENVAT credit.
2. **Exceptions**:
- Transport services that are used for business purposes, such as transporting goods, might be eligible for CENVAT credit.
- Transport services provided to employees that are incidental to the business activities (e.g., transportation of employees for work-related events or site visits) may also be eligible for CENVAT credit.
### Deduction from Employee Salary:
- If deductions are made from employee salaries for canteen or transport services, it typically indicates that these services are provided as a part of employee welfare. In such cases, CENVAT credit is usually not available because the services are not directly used in the provision of output services or in manufacturing activities.
### Conclusion:
- **Canteen Services**: Generally, CENVAT credit cannot be availed for canteen services provided solely to employees unless there is a provision for other stakeholders or it is provided in a manner that supports business activities.
- **Transport Services**: CENVAT credit can be availed for transport services if they are used for business purposes or are incidental to business activities.
To determine the exact eligibility for CENVAT credit in your specific case, it’s recommended to review the nature of the services provided, the documentation supporting their use in business activities, and consult with a tax advisor who can provide tailored advice based on your company’s circumstances and applicable laws.
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