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Cenvat credit of excise duty by service provider

Sunny jorkar (Article Assistant) (101 Points)

05 July 2013

Hello Friends,

A service Provider is registered under Service Tax but he is not registered under Excise...

My Querry is whether he can avail cenvat credit of Excise Duty against his Service Tax Liability????

(is it so if a service provider doesnt have excise number then he cannot avail Cenvat credit of Excise Duty??????)

Please do reply.....

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25 Replies

CA Harshal Pahade (Professional) (79 Points)
Replied 05 July 2013

Dear Friend,

Service provider can avail CenVAT credit against cervice tax payable. CenVAT credit inculdes credit on both goods & servises. There is no need to have excise registration for a service provider for availing CenVAT Credit...

1 Like

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Sunny jorkar (Article Assistant) (101 Points)
Replied 06 July 2013

Thank You Harshal......

Sunny jorkar (Article Assistant) (101 Points)
Replied 06 July 2013

Hello Harshal,

Can u give me more Details to confirm whether a service provider can avail excise credit even if he is not having excise number

Please do reply

even others do reply

CA Harshal Pahade (Professional) (79 Points)
Replied 06 July 2013

Dear Sunny,

CenVAT credit can be availed by both manufacturer & service provider. CenVAT Credit Rules 2004 applies both to manufacturer 7 service provider.

Rule 3 of CenVAT credit Rules 2004 clear states as follows

3. CENVAT credit. -

(1) A manufacturer or producer of final products or a provider of taxable service shall be allowed to take credit (hereinafter referred to as the CENVAT credit) of -

(i) the duty of excise specified in the First Schedule to the Excise Tariff Act, leviable under the Excise Act;

(ii) the duty of excise specified in the Second Schedule to the Excise Tariff Act, leviable under the Excise Act;........... ( very big section, only portion relevant to you produced here)

paid on-

(i) any input or capital goods received in the factory of manufacture of final product or premises of the provider of output service on or after the 10th day of September, 2004; and

(ii) any input service received by the manufacturer of final product or by the provider of output services on or after the 10th day of September, 2004,

You can get complete rule at following link: -

https://www.cbec.gov.in/excise/new-cenvat-rules.htm

Hope you find it usefule...

Regards: -

CA Harshal Pahade

Contact: - 9272344759

1 Like

satya (Executive Excise) (1839 Points)
Replied 06 July 2013

Hi, Harshal,

I am not agree with your openion,

pl.clarify;

When Cenvat Credit on goods purchases eligible only if his manufacturing finished/final product is dutiable only na?

in this case , he is only Service Provider only na..

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CA Harshal Pahade (Professional) (79 Points)
Replied 08 July 2013

Dear Sathya,

You have not gone through Rule 3 of CenVAT Credit Rules 2004 thoroughly... It clearly states that a provider of taxable service shall be allowed to take credit of : -

1. The Duty of Excise specified in first schedule to Excise Terrif Act, leviable under Central Excise Act.....

ii) .....

iii).....

paid on

any Input or Capital Goods received in the factory of of manufacturer of final product or premises of provider of output service...

of - (i) the duty of excise specified in the First Schedule to the Excise Tariff Act, leviable under the Excise Act;

Read more at: /forum/details.asp?mod_id=255392&offset=1

Also we do claim CenVAT Credit of Excise Duty in case of many Service Providers. So we can say that practically as well credit can be taken & proven in case of Service tax audit as well...

Regards,

CA Harshal Pahade

Chartered Accountant

Contact 9272344759

1 Like

satya (Executive Excise) (1839 Points)
Replied 08 July 2013

Dear Harshal ji,

OK .. subject to Cenvat Credit on Goods purchases is eligible, i.e., that goods are used in the relation of supporting to providing his output service ...

am I clear sir?

Prabhat Kumar (Advocate & Consultant) (1912 Points)
Replied 08 July 2013

HE CAN USE AND UTILISE THE CEN VET CREDIT ONLY IF THE GOODS INVOLVING EXCISE DUTY ARE USE AND UTILSE IN PROVIDING SERVICES.IT DOES NOT MATTER WHETHER THE PERSON IS REGISTERED UNDER CENTRAL EXCISE OR NOT.