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Can input tax credit can be claimed even no taxable services provided

ANIL PASUPULETI (articled assistent) (99 Points)

01 September 2016

DEAR SIR, CAN COMPANY CLAIM INPUT TAX CREDIT OF SERVICE TAX EVEN NO TAXABLE SERVICE PROVIDED DURING THE YEAR 1-CAN COMPANY CLAIM INPUT TAX CREDIT 2-IF ALLOWED MEANS HOW MUCH PERIOD 3-PLEASE GUIDE ME THE SECTION TO REFER ME 4-IT IS SOFTWARE SERVICES PROVIDING COMPANY 5-CAN COMPANY FILE SERVICE TAX RETURN TO CLAIM INPUT SERVICE TAX OR NO NEED TO FILE ETURN

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6 Replies

Sunil Kumar (Indirect Taxation ) (1246 Points)
Replied 04 September 2016

No, to get credit of service tax you

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Sunil Kumar (Indirect Taxation ) (1246 Points)
Replied 04 September 2016

Need to provide taxable service.

ANIL PASUPULETI (articled assistent) (99 Points)
Replied 07 September 2016

Thank u so much sir,

sir can you please guide me the rule or provision kindly

Sunil Kumar (Indirect Taxation ) (1246 Points)
Replied 07 September 2016

Please read the following extracts of Rule 6 of Cenvat Credit Rules 2004

The CENVAT credit shall not be allowed on such quantity of input as is used in or in relation to the manufacture of exempted goods or for provision of exempted services or input service as is used in or in relation to the manufacture of exempted goods and their clearance upto the place of removal or for provision of exempted services and the credit not allowed shall be calculated and paid by the manufacturer or the provider of output service, in terms of the provisions of sub-rule (2) or sub-rule (3), as the case may be :

―(2) A manufacturer who exclusively manufactures exempted goods for their clearance upto the place of removal or a service provider who exclusively provides exempted services shall pay the whole amount of credit of input and input services and shall, in effect, not be eligible for credit of any inputs and input services.