09 July 2015
Nowadays, Banks outsource certain ATM (Automated Teller Machine) related services to other agencies such as operations,maintenance or management of hardware and software, cash replenishment etc. Since these services are taxable service provider is liable to pay service tax. Agencies(Service Providers) are collects the charges per transaction including service tax from Banks & make the payment to Govt. Banks collects charges (including service tax)from their customers / Other Banks in case ATM is used by other bank customers & make the service tax payment to Govt. Request you to clarify the following points on the aforesaid transactions :- a) Bank can claim CENVAT on input credit ? b) If yes, what is the percentage of CENVAT can claim, what are the details to be maintained for the same. c) Bank can set-off the input credit with service tax payable on charges collected from customers / other banks on the same transactions, what are the details to be maintained for the same.