joji jose (audit manager) (242 Points)
04 February 2010Dear sirs,
One of our client is a serive provider. He is doing the business of shipping services. He is collecting service tax from his clients. Presently he brought Capital goods by paying Excise duty on that. At the time of payment of service tax he had claimed the Excise duty paid on capital goods as CENVAT credit from service tax collected. Is it possible to do so?
Kindly guide me in this case
Amir
(Learner)
(4016 Points)
Replied 04 February 2010
Dear Josi Jose,
Cenvat Credit of Excise Duty paid on Capital Goods can be setoff against the service tax liability.
Conditions
1) Capital Good must be specified in the Defination of capital goods under Rule 2
2) Capital goods must be used for providing taxable service (not necessarily the one against which credit is to be utilized)
3) Credit is available in 2 years - 50% each
4) Abatement should not be claimed on output service
C.Balaji
(Learner)
(1867 Points)
Replied 05 February 2010
Dear Josi Jose,
Agree with Mr.Amir brother
Cenvat Credit of Excise Duty paid on Capital Goods can be setoff against the service tax liability.
Capital Good must be specified in the Definition of capital goods
Capital goods must be used for providing taxable service (not necessarily the one against which credit is to be utilized)
Credit is available in 2 years - 50% each
Abatement should not be claimed on output service
Madhukar N Hiregange
(Chartered Accountant)
(39034 Points)
Replied 07 February 2010
Abataement 1/06 requires that no credit be claimed. However not.12/2003 or compostion shcemes do not require the same. The abatement notification should be seen to see if the condition of CG credit is expressly excluded. Otherwsie it would be available.
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