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of <h1>Hotel Chains Misclassify Services, Violate Cenvat Credit Rules, 2004, Leading to Excessive Credit Utilization Nationwide.</h1> Leading hotel chains have been found utilizing Cenvat Credit beyond permissible limits by misclassifying services. A hotel in Chandigarh appointed an operator to manage services, claiming them as 'business or management consultancy services' to avail 100% credit, despite using these for both taxable and exempted services. However, the services provided fall under Business Auxiliary Services or Business Support Services, not eligible for full credit. This misclassification has led to excessive credit utilization, violating Cenvat Credit Rules, 2004. The issue has nationwide implications, and authorities are urged to circulate this modus operandi to field formations.
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