Can the service tax paid for credit card be taken as input tax if the credit card is paid by the company for its top management staffs/
devipriyaa (head-accounts) (28 Points)
18 November 2009Can the service tax paid for credit card be taken as input tax if the credit card is paid by the company for its top management staffs/
Sunil
(Trader)
(2611 Points)
Replied 18 November 2009
The fees and interest you pay for credit card cannot be considered as an input for your output service. You use credit card for your convenience / expediency. Service tax on phone / internet can be considered but the membership fees, late payment and revolving interest on a credit card cannot be considered. Say you lose the card and replacement costs, where will it have a nexus to your service. You will have to connect each individual charge.
If a professional has to bill his out of pocket expenses like say cost of air ticket to a company and he also has to bear service tax on this reimbursement, if he has paid through credit card and has been levied a transaction fee for purchase of the ticket to his client incuding the transaction cost on credit card with service tax, then the transaction cost has a nexus to the output service and can be termed as an input.
You will have to make an undisputable connection.
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