Cenvat credit on rent a cab
This query is : Resolved
10 December 2015
Dear Sir,
we are paying service tax on rent a cab on reverse charge basis. we are manufacture as well service tax provider also. we are using Bus from bus facility provider on monthly rent basis to pick up and drop to our employees from station to company.
can we avail cenvat credit on service tax which we paid under reverse charge machanisum on rent a cab...please advice
we are paying service tax on rent a cab on reverse charge basis. we are manufacture as well service tax provider also. we are using Bus from bus facility provider on monthly rent basis to pick up and drop to our employees from station to company.
can we avail cenvat credit on service tax which we paid under reverse charge machanisum on rent a cab...please advice
11 December 2015
As per the Cenvat Credit Rules. the credit of service tax payable by the recipient of the service can be taken only when
1) The value of taxable service has been paid to the service provider (within 3 months from the date of invoice)
2) Service tax has been paid to the department
Therefor in view to your query
YES you can take credit on service tax paid on reverse charge mechanism
1) The value of taxable service has been paid to the service provider (within 3 months from the date of invoice)
2) Service tax has been paid to the department
Therefor in view to your query
YES you can take credit on service tax paid on reverse charge mechanism
11 December 2015
but, excise auditor saying that rent a cab service has been excluded from input service vide noti. no. 18/2012. he has sent me a following note...please see and advise me.
7. CENVAT CREDIT
7.1 Whether Cenvat Credit is available on Rent-A-Cab Service?
The Hon’ble Karnataka High Court in the case of CCE Vs. Stanzen Toyotetsu India (P) Ltd. [(2011) 32 STT 244 (Kar.)] held that the transportation/Rent-a-Cab service is provided by the assessee to their employees in order to reach their factory premises in time which has a direct bearing on manufacturing activity. In fact, the employee is also entitled to conveyance allowance which would form part of his condition of service. Therefore, by no stretch of imagination it can be construed as a welfare measure by denying the availment of Cenvat credit to the assessee for providing transportation facilities as a basic necessity which has a direct bearing on the manufacturing activity. This decision was again followed by the same court in the case of CCE Vs. Tata Auto Comp Systems Ltd. CEA No. 132 of 2009.
But, w.e.f. 01-04-2011, the Central Government has amended the definition of ‘input service’ under Rule 2(l) of Cenvat Credit Rules, 2004 vide Notification No. 3/2011 – CE(NT) dated 01-03-2011 and again vide Notification No. 18/2012 – CE(NT) dated 17-03-2012 (w.e.f. 01-04-2012). The effect of the amendment is that rent-a-cab service has been specifically excluded from the definition of ‘input service’ and hence cenvat credit is generally not available. Cenvat Credit is available only when rent a cab service could be related to a motor vehicle which is capital good for them. In other words, when a motor vehicle designed to carry passengers including their chassis, registered in the name of provider of service, when used for provided output service of- (i) transportation of passengers; or (ii) renting of such motor vehicle; or (iii) imparting moto
7. CENVAT CREDIT
7.1 Whether Cenvat Credit is available on Rent-A-Cab Service?
The Hon’ble Karnataka High Court in the case of CCE Vs. Stanzen Toyotetsu India (P) Ltd. [(2011) 32 STT 244 (Kar.)] held that the transportation/Rent-a-Cab service is provided by the assessee to their employees in order to reach their factory premises in time which has a direct bearing on manufacturing activity. In fact, the employee is also entitled to conveyance allowance which would form part of his condition of service. Therefore, by no stretch of imagination it can be construed as a welfare measure by denying the availment of Cenvat credit to the assessee for providing transportation facilities as a basic necessity which has a direct bearing on the manufacturing activity. This decision was again followed by the same court in the case of CCE Vs. Tata Auto Comp Systems Ltd. CEA No. 132 of 2009.
But, w.e.f. 01-04-2011, the Central Government has amended the definition of ‘input service’ under Rule 2(l) of Cenvat Credit Rules, 2004 vide Notification No. 3/2011 – CE(NT) dated 01-03-2011 and again vide Notification No. 18/2012 – CE(NT) dated 17-03-2012 (w.e.f. 01-04-2012). The effect of the amendment is that rent-a-cab service has been specifically excluded from the definition of ‘input service’ and hence cenvat credit is generally not available. Cenvat Credit is available only when rent a cab service could be related to a motor vehicle which is capital good for them. In other words, when a motor vehicle designed to carry passengers including their chassis, registered in the name of provider of service, when used for provided output service of- (i) transportation of passengers; or (ii) renting of such motor vehicle; or (iii) imparting moto
14 December 2015
Yes, after going through the rules again. the amended rule 2(1) of CENVAT CREDIT Rules does exclude renting a cab except if CAR forms a part of capital goods.
So the auditor is right in stating the diss allowance.
So the auditor is right in stating the diss allowance.
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