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service tax input credit

Kirti (Accounts Executive) (62 Points)

12 October 2007

Service Tax input credit

our Firm is involved in commissioning income on which service tax is applicable.

Firm also invovled in material trading acitivities.

would like to know that can we get 100% input service tax, which is charged by our vendors ( eg.phone bill, tax consultant bills etc....)

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14 Replies

Kirti (Accounts Executive) (62 Points)
Replied 12 October 2007

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(Guest)

Service tax input credit

Neeta Gupta (83 Points)
Replied 13 October 2007

hi! you can utilised 100% credit input except on capital goods.capital goods 50% input is allowed rest 50% carried over to next year and you can claim in next year

Dayal (Gen. Manager - Indirect Taxation) (3434 Points)
Replied 20 October 2007

Service Tax credit is available only if the input service is used in relation to output service. It need not fall under same category. In your case, the input service cannot be utilised 100% against your output service as you are also providing exempt service ( Trading activity) Under such circumstance you can avail 10% credit but can utilise only 20% of the liability of your service tax . for eg. if your service tax payable is Rs.100 you can utilise only Rs. 20. However you can avail credit of 16 services as provided in rule 6(5) which provides that full tax credit will be allowed when they are used as input service, for providing both taxable and exempt services. Or If you are risk taking and have the tendancy to fight back you may apportion the credit with respect to your taxable and exempt services and avail proportionate credit Please note there is no provision in the act that allows proportionate credit. The rule that exist today is that if you avail full credit in your case then you have to pay 10% of the value ofexempt service. It would be ideal to evaluate your position in the matter after discussion with your leagal department and or consultant in the matter

Dayal (Gen. Manager - Indirect Taxation) (3434 Points)
Replied 20 October 2007

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(Guest)

Hi, In case of hospital,Charging Consultancy Fees from another hospital inclusive of service tax and taking some input services like AMC,CA Fees,Architecture,Interior Decorator etc.Can we claim Input Credit of such services?If Yes then to what extent?

(Guest)

our firm is involved in recruitment buisiness on which the service tax is applicable. i woul like to know that can we get full amount of input Servicetax which it not related in to recruitment buisiness?

Dayal (Gen. Manager - Indirect Taxation) (3434 Points)
Replied 07 November 2007

Dear Shanib Kindly provide details of services availed in providing recruitment services The few input services that i can think of is Advertising, Telephone, Mobile, Rentals for the premise you are operating from, You can take credit of all the above Dear Jyoti, Please note that if service tax is not seperately shown in the invoice / bill of service provider you cannot avail the credit in terms of Rule 4A, AMC credit can be taken on proportionate basis for every quarter or half yearly and balance after the close of the period, Input credit can be taken on modernisation of the office of the service provider, in such case if the interior is of the hospital you need to evaluate the same

G Teja (Partner) (49 Points)
Replied 10 November 2007

dear neeta she can't avil 100% input. Dear kiriti, Mr. Dayal statement is correct to the extent of service tax act is concern. You can avail only 20% of input against the output liability.

(Guest)

service tax input on capital goods can we claim or not

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Dayal (Gen. Manager - Indirect Taxation) (3434 Points)
Replied 29 September 2008

this is replied above

Dayal (Gen. Manager - Indirect Taxation) (3434 Points)
Replied 29 September 2008

What is your exact query, capital goods credit you can avail, but you need to give the background, whether you are service provider , manufacturer or both or carrying out trading + services +manufacturing

(Guest)

question: The Pvt. co. is engaged in health club and fittness services charging s.tax on services. and on the other hand the co. is paying rent on which the owner is charging s.tax

can the co. set off s.tax liability against the s.tax paying on the rent.