Service tax rule 6

rutambh (.....) (217 Points)

15 December 2011  

I have a little doubt regarding avail of Service Tax Credit rule 6(3)(iii).

Four Types of Manufacturer,

Type-I        : Manufacture the Dutiable Goods
Type-II    : Manufacture the Exempted Goods
Type-III    : Manufacture the Dutiable and Exempted Goods also.
Type-IV    : Manufacture the Dutiable Goods and Purchase the Finished Goods   with
                          own Trademark   from other manufacturer and Sales it.(Trading activity)

 We are ‘Type-IV’ manufacturer of Pharmaceuticals Product.

Can we take common service tax as per rule 6(3)(iii) as per below mention formula?

E : Total value of exempted goods  (Total Sale value Trading Goods- Total Purchase value of Trading Goods)

F : Total Sale value of taxable goods + Total value of exempted goods

G : CENVAT credit taken on input services during the month

(E/F) x  G : Amount to be reversed every month on provisional basis as per rule 6(3A)(b)(iii)

My doubt that Rule 6(3)(iii) is only applicable to Type-III manufacturer because we are manufacturing the Dutiable Goods only but not manufacturing the Exempted goods.