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Cenvat Credit

Gagan Gupta (Chartered Accountant) (161 Points)

18 December 2007

Hi all

A company is engaged in import of software and following duties are paid on import.

Basic custom duty = 0%

CVD = 8%

Education Cess = 3%

In India company sell these software and also provide service in respect of these softwares (AMC of software). All the services are provided only in respect of software sold by the company to its customer. AMC of software is subject to service tax @ 12% plus education cess.

My query is whether the company can claim CENVAT Credit of CVD paid on import against payment of service tax payable on output service (i.e. AMC of software) provided by the company to its customer.

Kindly mention the Cenvat Credit Rule.

Regards

Gagan

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4 Replies

(Guest)

No, Sale Transction has completed.(sale Cointract)- here no manuafcaturing process hence Cenvat not allowed. AMC is another contract (Service contract). Now here Cenvat can be claimed by the`service receiver if he use for mfg or service purposes We cannot mix Call me 9371209751 We cannot mix

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shyam kishor porwal (Chartered Accountant) (183 Points)
Replied 21 December 2007

cenavt credit of CVD is allowed only if manufactured through imported material. AMC is other contract covered under service tax. u can not use cenvat credit of CVD.

(Guest)

As per the provisions of Cenvat Credit Rules, 2004, the service provider is allowed to take Cenvat Credit of the excise duty paid on inputs used for providing any taxable service and the service tax paid on input services received by him. In your case you have not used the software imported for providing an taxable service.Hence you are not eligible for credit of CVD

hamid (Manager Finance/Commerce) (74 Points)
Replied 30 December 2007

you are not used these imported software for provide any taxable service. As per the provisions of Cenvat Credit Rules, 2004, the service provider is allowed to take Cenvat Credit of the excise duty paid on inputs used for providing any taxable service and the service tax paid on input services received by him.