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Service tax credit on mediclaim policy

Ramesh (Manager) (43 Points)

09 July 2012

We are Manufacturer / Service Provideder, We received service tax credit on Mediclaim Policy provided by the company for the Employees. are we eligible to avail the credit. is there any notification / case law / document

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6 Replies

Ajit kumar Dubey (Taxation Manager) (637 Points)
Replied 09 July 2012

No as this service is covered under the exemption list provided in the definition of input services under Rile 2 of CCR, 2004, no CENVAT Credit will not be allowed on the said service.

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Prateek Agarwal (Sr. Executive - Finance & Accounts) (1732 Points)
Replied 10 July 2012

Dear Ajit Sir,

Can you please elaborate on the exemption point?

Thanks

Ajit kumar Dubey (Taxation Manager) (637 Points)
Replied 10 July 2012

Please go through the provisions of Input services as defined in the CCR, 2004 whereby the said service is excluded from the definition of input services. Thus, no credit on the same will be allowed. For detail illustrations refer Rule 2 of the CCR, 2004. Incase of any confusion you can put your query.

Prateek Agarwal (Sr. Executive - Finance & Accounts) (1732 Points)
Replied 11 July 2012

Dear Sir,

Please find the definition of input service:-

"input service" means any service,-
	(i)	used by a provider of taxable service for providing an output service; or
	(ii)	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,
	and includes services used in relation to setting up, modernization, 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, activities relating to business, such as accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating, share registry, and security, inward transportation of inputs or capital goods and outward transportation upto the place of removal;

There is no specific exclusion of mediclaim services. Since a provider can use any input service directly or indirectly for provision of services or manufacture of goods, I think he can claim the service tax paid on mediclaim. The only exclusion is GTA service, that too, for the consignor (upto the place of removal).

Please correct me if I m wrong.