Service tax credit on o&m charges & service charges

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Purav (Querist)
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14 September 2011 There is a manufacturing company located in state of Gujarat. It is having a windmill in Gujarat. The electricity generated at Gujarat Windmill is transferred to the PGVCL (GEB). In return PGVCL sets off the amount of electricity generated through windmill from the Electricity bill of factory. Suzlon Infrastructure Ltd. maintains the Windmill & raises to the company the bills for Operation & Maintenance Charges (O & M) & Service Charges quarterly. On both the bills it levies Service Tax. The question here is, whether the company can avail the cenvat credit of the service tax on these bills of Gujarat Windmill or not. Please suggest in the light of amended definition of Input Service.

Madhukar N Hiregange

Madhukar N Hiregange (Expert)
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15 September 2011 Cenvat Credit shouldbe available as the same is in relation to generation of power. The amendment allows for credit of the cpaital goods as well as inputs used in generating the same as I have understood.

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