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Credit of service tax

Ajay Singh (Senior Accountant) (97 Points)

21 September 2011

Hello friends

Kindly help me in below mentioned topic:

We have a newly formed manufacturing company. It is not registered to excise but it is registered to service tax. We take services on which we pay service tax. We are also doing job work, repair & maintenance on which we charge service tax.

My question is : Can we take credit of service tax paid against service tax charged by us from our customers.

In short can we take credit of service tax against service tax charged.

Kindly help me on above topic with rule and circular. Thanks in advance.

Thanks

Ajay Singh

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2 Replies

valji (Accounts manager-MBA) (2150 Points)
Replied 21 September 2011

please register under input service in service tax department for getting input credit of service tax

Sunil Singh Thakur (AAO) (295 Points)
Replied 21 September 2011

Credit for Input service Tax is allowable for payment of Output service tax as per CENVAT Credit Rules, 2004. As per CENVAT Credit Rules, 2004 Input service means ,any service-

1. used by a provider of taxable service for providing an output service, or

2. used by the manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and clearance of final products, upto the place of removal. [Refer Rule 2 ( l ).

Thus in the subject case, if the input services utilised qualifies as per the said rule, CENVAT credit is available for adjustment against output service tax liability.