Our Client is a two-wheeler dealer for a leading brand in India.
The Client pays excise duty on the two wheelers purchased from the manufacturer. The Client also charges Service Tax on the vehicle service carried out (free + paid service). Can this Company claim credit for the excise duty paid on vehicles purchased from the manufacturer against the service tax payable towards vehicle service.
07 October 2010
No it cannot as the 2 w are not used for providing the service. However the GTA paid, insurance for the show room, telephone etc would be available as per the CCR. Pl confimr that Rule 6 is not applicable to you.
Thanks a lot for the input. Yes Rule 6 is not applicable to our client.
Continuing on the aforesaid query, in every vehicle service (free and paid service), there are two elements, labour and parts. The parts are purchased from the vehicle manufacturer and there is an element of excise duty involved in the parts purchased. Service tax is chargeable on the labour component. Can these two be set off and the net service tax remitted to Government.
CAclubindia
