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Co. engaged in trading busines is eligible for cenvat credit

Nikhil (Article) (59 Points)

03 February 2012

1 of our client is a private limited company. They provide Business Auxillary Service as Taxable Services. They are engaged in trading business also. All their Services is Taxable.
Therefore, will the company get credit of all the INPUT CREDITS paid ?? Since they are engaged in TRADING BUSINESS also they wont become eligible for SETOFF?

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3 Replies

Subramanya (in practice) (109 Points)
Replied 03 February 2012

Hi Nikhil...

A co. can claim d input credit for Serv tax paid even if it has trading business also....

And this goes wid the simple logic dat if d co is carrying on trading as wel as providing services, it has to collect n pay VAT as well as service tax, and wid d same logic it can claim credit for VAT and Service tax paid also..

Correct me if i am wrong...

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U S Sharma (glidor@gmail.com) (21056 Points)
Replied 03 February 2012

Input services used in trading activity is not eligible for input credit, however the input services used in providing taxable services do qualify for input credit, provided no exemption or abatement is claimed.

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Nikhil (Article) (59 Points)
Replied 04 February 2012

thnx alot for your reply..

bt the co. is using the input services for both trading and taxable purpose...and do not have separate accounts i.e. how much used for trading and how much for taxable purpose.

stil the co. can avail whole input credit on service tax payable?