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

AI Summary

Client Queries CENVAT Credit for ORACLE Software Purchase Amid Service Tax and VAT Uncertainties; Input Credit Over Two Years A client is purchasing an ORACLE-E Business Suite Software through a business partner, who charges Service Tax under Information Technology Service and VAT due to uncertainty. The client inquires about using CENVAT Credit to offset liabilities in other service categories, considering the software's use in non-taxable services and transactions. One respondent suggests that the software, as a capital input, allows full CENVAT credit over two years, regardless of its use in non-taxable services. Another respondent discusses unrelated disallowed expenses in transmission and tower line, vehicle hire charges, and site expenses.