vivek dudheria (CFO) (41 Points)
10 June 2010Our client is a hotel and we will be supplying cars on hire to them.We will also give them 20 % commission on cars taken by their guests.Since this will be under service tax net ,ill the hotel be able to claim input credit on the entire service tax paid by them on this commission.
RAMESH KUMAR VERMA
( CS PURSUING )
(43853 Points)
Replied 10 June 2010
DEAR SIR,
AS PER FOREIGN TRADE POLICY 2009-2014, HOTEL IS A SERVICE PROVIDER, & PROVIDING OUTPUT SERVICES LIKE TAXI HIRE, CAR, DRY CLEANING, BROAD BAND, CREDIT CARD, etc.
HOTEL, EITHER ANY STAR, CAN AVAIL AND LIABLE AVAIL CENVAT CREDIT OF SERVICES RECEIVED SOME OF THE INPUT SERVICES CAN BE COMMON INPUT SERVICES WHICH MAY BE DIRECTLY OR INDIRECTLY RELATED TO PROVISION OF OUTPUT SERVICES. THEREFORE BASED ON THE ANALYSIS OF INPUT DEFINITION AND CENVAT CREDIT RULES THE SERVICE TAX PAID ON INPUT SERVICES CAN BE AVAILED. THE INPUT SERVICE TAX UNDER THE SERVICE TAX CAN BE AVAILED ON THE PAYMENT BASIS.
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