Rule 6 of cenvat credit rules-Query

This query is : Open

Manoj BG (Querist)
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18 February 2011 Hi all,

Please guide me on the following matter.

In respect of Rule 6(3) of cenvat credit rules 2004, proportionate credit would be allowed in case where the assessee doesnt maitain seperate set of books for taxable and exempted services. And assessee would be then eligible to claim cenvat credit on only those input/ input services which actully been utilised for providing output service or removal of finished goods.

Exempted Services is defined under cenvat credit rules 2004 as follows :

2(e) "exempted services" means taxable services which are exempt from the whole of the service tax leviable thereon, and includes services on which no service tax is leviable under section 66 of the Finance Act;

Now my question is whether exempted service income also include Income earned by way of interest on investment, dividend also..

Thanks and Regards,

Manoj

CA Unnikrishnan Nair N

CA Unnikrishnan Nair N (Expert)
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18 February 2011 No, it is not a service at all. No need to treat interest on investment and dividend as exempted service for the purpose of Rule 6(3).

Manoj BG

Manoj BG (Querist)
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18 February 2011 Thanks for your valuable reply.
Would u please clarify your answer with any supporting case laws or circular notification.

Regards,

Manoj B. Gavali

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Manoj BG

Manoj BG (Querist)
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19 February 2011 Sir, would u please help me out what is the definition of service for the purpose of service tax. Further, service tax law doesnt mention anywhere abt meaning of service neither it mentions reference to any act frm where we should take the meaning of service for the purpose of service tax. General clauses act which is residuary definition act, also doesnt have meaning of service. However, consument protection act 1986 does have the definition of service. So can we use the same for the purpose of service tax as well...!!!

CA Unnikrishnan Nair N

CA Unnikrishnan Nair N (Expert)
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19 February 2011 There are CESTAT decisions that Rule 6 applies only when the activity amounts to service. Although this has been rendered in the context of trading of goods, same has application under given facts.I am searching for the citation.

Manoj BG

Manoj BG (Querist)
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19 February 2011 once u got that decision please share the same with me...!!!