Payment of service tax through cenvat - other category

[ranganath shenoy]

Our client is purchasing(or is rather licensed to use) ORACLE-E Business Suite Software,which is more or less a packaged software. The same is required for the purpose of integration with the larger information system to be put in place which includes accounting as well .The software is not sold by ORACLE directly but is being sold by their Business Partner.Therefore,this business partner is charging Service Tax and not Excise Duty.Because of the uncertainty,they are also charging VAT. Now, Service tAX is being charged under Information Technology Service.Is it possible to avail CENVAT CREDIT to pay-off liability under some other category of out put Services.Assuming that the information system is also being used in rendering NON-TAXABLE service or other tranasactions which are nor service at all(like investment etc. of surplus funds,is it necessary to follow the proportionate formula

[DEV KUMAR KOTHARI]

The software is capital input, so CENVAT will be allowed fully in two years. in my view it will make no difference even if some services rendered are not taxable and softwar is used for such services also.

[ajaykumar jha]

what is disallowed expenses in Transmission and tower line. and brief details hire charges vehicle and tools and plant. and advance for site expenses.

AI Summary

CENVAT credit on licensed packaged software can be availed as capital input despite mixed use across taxable and non taxable services. Whether service tax paid on licensed packaged software supplied by a reseller under Information Technology Service can be availed as CENVAT CREDIT and applied to other output service liabilities, and whether partial use for non taxable activities necessitates a proportionate formula for credit adjustment. A respondent advises treating the software as a capital input permitting CENVAT credit (noting a two year absorption) and indicating that use for non taxable services would not preclude the credit.