A company is providing two different services and no demarcation of books is being maintained by the company. Can service tax input pertaining to one service be adjusted against payable of another service.
S. Murali
7 Replies
Madhukar N Hiregange
(Chartered Accountant)
(39034 Points)
Replied 02 November 2010
No one to one corelation in cenvat credit. The excise duty on capital goods, on eligible inputs and eligible input services of one service can be used to pay the excise duty on manufactured products or any services provided.
Rajesh Kumar. C
(Sr.Consultant - Indirect taxes)
(40 Points)
Replied 11 November 2010
Availment of CENVAT credit is one aspect and Utilisation against output liability is another.
As long as both the Services provided are taxable, there is no restriction in availment of credit.
Where one service is of a taxable category and the other is an exempted service, Rule 6 of CENVAT Credit Rules would apply and require maintenance of separate books of accounts / option to pay tax at the prescribed rates.
As regards utilisation of credits, as rightly said in earlier reply posts, one to one correlation with Input Service is not mandated.
Rgds,
Rajesh
Amit K Jain
(chartered accountant in practi)
(25 Points)
Replied 27 November 2010
please provide me information on the following:-
my client is a fabrication unit, liable under Service tax as well as Excise Laws. it went for IPO and has paid huge amount for services in relation to IPO and also service tax. Can it take input credit of Service tax paid for services in relation to IPO.
amit k jain
CS Vijay Daxini
(At Practice)
(732 Points)
Replied 28 November 2010
Ganesh
(CA)
(111 Points)
Replied 01 December 2010
| Originally posted by : Amit K Jain | ||
 |
please provide me information on the following:- my client is a fabrication unit, liable under Service tax as well as Excise Laws. it went for IPO and has paid huge amount for services in relation to IPO and also service tax. Can it take input credit of Service tax paid for services in relation to IPO. amit k jain |
 |
Dear Amit,
As this expenditure is incurred for consulting/other services required for a successful IPO, which is critical for financing the business activity, you should be able to take credit of this amount.
Thanks,
Ganesh
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