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Input service tax

Basavaraj (B.Com FCA) (193 Points)

27 March 2013

Hi,

My client is a Dealer in Automobile Accessories and Apparels like riding Gears....etc for imported vehicles mainly Harly Davidson Bikes. They also have option to get them fitted in their own workshop for which they charge service charges say 1000 per hour.

They pay service tax on various services they recieve like, Accounting Service, EDC Commission, Security services, Telephone, Internet, Clearing and forwarding charges, Frieght Charges.....etc.

Can i take a input credit for the above service tax paid on services listed above.

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Ankit Agarwalla (CA) (281 Points)
Replied 27 March 2013

If the input service is not directly or indirectly conncected to manufacture, credit can be availed if it is covered under the 'and includes' part of the definition which is as under -

''and includes services used in relation to modernisation, renovation or repairs of a factory, premises of provider of output service or an office relating to such factory or premises, advertisement or sales promotion, market research, storage upto the place of removal, procurement of inputs, accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating, share registry, security, business exhibition, legal services, inward transportation of inputs or capital goods and outward transportation upto the place of removal;''

So, it seems majority of your services are being covered here, so you can take credit for the same.

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