credit of service tax allow

This query is : Open

anupam (Querist)
Follow

26 May 2008 A bank provides taxable as well as exepmted sevices. but does not maintain seprate books for that.now if bank pay service tax on input service like hire expenses of car for there employees n it is not possible to provide direct relationship between taxable output services n car hire expenses can bank can bank utilise credit on hire expenses of car?

CA Hemant T Dewani

CA Hemant T Dewani (Expert)
Follow

26 May 2008 you will utilised maximum 20% of output service for taking credit of input service f e out put service tax is 100 then you will get setoff of rs 20 for input service,if input service is greater than output service i e rs 20 then you will carryforward the same for next period

anupam

anupam (Querist)
Follow

26 May 2008 the main part of query was if i am not able to corelate the hire expenses with taxable output service even than can i utilise 20%tax??

Upgrade to CAclubindia Pro. Subscribe Now!

CA. Yayati Tyagi

CA. Yayati Tyagi (Expert)
Follow

26 May 2008 in my opinion, there is no need to establish correlation between input and output services in cenvat credit rules. credit is allowed as and when payment for service is made.