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Input credit on bank charges

Ajay s (Accounts Officer) (243 Points)

10 September 2011

Dear All

We paid Processing Fee for Loan & Guarantee including service tax

Whether we can avail that Credit?

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8 Replies

CA Ankur Goel (sr. executive) (133 Points)
Replied 10 September 2011

Yes, U can take cenvet credit of service tax charged by bank on these expenses.

Only condition, this is ur input service.

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CA Prabhat Gupta (Manager (Indirect Taxes)) (821 Points)
Replied 10 September 2011

Yes you can Claim credit of service tax paid. Just ask the Financing Organization to issue you a Certificate showing break up of Processing Fee for Loan & Guarantee and Service Tax thereon. Because in most cases, banks and other financial instititions do not issue any bill or invoice as a proof of Service tax been charged. Ask them to give basic details like service tax registration number of bank and details of payment as banks & financial institutins are exempt from other requirement of serially numbered invoices and challans.

varun (finance officer) (31 Points)
Replied 14 January 2012

we are in manufacturing / repair overhaul industry and paying sevice tax to bank on bank charges , LC opening , Bank guarantee etc etc. Can we avail credit of service tax charged by bank on service tax liabilty arises due to repair & overhaul activity.\

CA Prabhat Gupta (Manager (Indirect Taxes)) (821 Points)
Replied 14 January 2012

Yes, if the bank charges are in relation to the business of providing taxable output services, you can easily prove that the charges and service tax thereon were in respect of input services. Once you porve that service tax is paid on input services, you can claim input credit on the same. Refer CENVAT Credit Rules, 2004.

SUNIL (ACCOUTANT) (167 Points)
Replied 14 January 2012

yes cenvat credit is available.

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parteekjain (Student) (95 Points)
Replied 31 March 2012

IF A PERSON IS WORKING AS BROKER OF STOCK EXCHANGE AND HE HAS AVAILED A BANK GAURANTEE FROM BANK ON WHICH THE BANK HAS CHARGED SERVICE TAX ALONG WITH BG CHARGED . FURTHER THE BROKER HAS SUBMITTED THE BG WITH EXCHANGE, ON WHICH EXCHANGE HAS ALSO CHARGED PROCESSING CHARGES ALONG WITH SERVICE TAX. PLEASE TELL CAN BROKER CLAIM CENVAT CREDIT OF THE ST PAID ON BOTH BG CHARGED AND BG PROCESSING CHARGES, KEEPING IN THE VIEW THE CHANGES MADE IN RECENT BUDGET IN THE DEFINATION OF INPUT SERCIVES.

THANKS IN ADVANCE .

URGENT REPLY IS HIGHLY APPRICAITED.

Madhu (student) (65 Points)
Replied 29 November 2012

SERVICE TAX ON LOAN PROCESSING CHARGES FOR TERM LOAN AND CASH CREDIT LOAN WHTHER CENVAT CREDIT IS AVAILABLE ?

CMA Bhavya (Jr.Finance Controller) (27 Points)
Replied 20 May 2014

Dear Sir,/

We are manufacturerers, have received mail from Bank while processing the import & Exports Payments clearly mentioning the Service tax portion on Processing & TT/DD Chrges. Is the Mail document is suffiecient to take the Input credit . Or we need to follow any particular procedure like Mr. Prabhat Gupta mentions.

Please clarify me