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Excise creadit from service tax

13 July 2012

Can a manufacturing company that has paid excise duty on the purchase of raw material take credit of such excise duty from service tax paid under the head-ST on rent from immovable property?

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2 Replies

Parihar Gopal (Corporate Taxation ) (392 Points)
Replied 13 July 2012

Input credit of service tax can be taken only if the output is a‘service’ liable to service tax or ‘goods’liable to excise duty.Since immovable property is neither service’ nor ‘goods’ liable to excise duty, input credit cannot be taken.

reference-

CBEC Circular No. 96/7/2007 dated 23.8.07 [as amended vide

Circular dated 4.1.2008

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Ajit kumar Dubey (Taxation Manager) (637 Points)
Replied 13 July 2012

Mr. Parihar as far as I recollect that circular was issued for the purpose of clarifying the doubts in relation to construction service or works contract service used for construction of an immovable property which is not the case here. If it is a manufacturing company then indeed you are entitled to adjust the amount of duty paid on inputs for discharging service tax liability under the head Renting of Immovable Property. Also, there is no such exclusion in the definition of inputs nor in the definition of input services as per CCR, 2004.