Credit Availiability

[BrahmaputraCrackerandPolymerLimited AGovt.OfIndiaEnterprise]

We are in project stage. The company is having a website which is used for dispaly of tender and display of other notices pertaining to the company. The website is being managed by outside agency, which is charging service tax on the bill. Whether credit is availiable on the same.

[MANDAVILLI RAMAKRISHNA]

your company is manufacturing company. you are paying ST on the advertisement for inviting contractors. Now your company is in project stage. ST can be taken credit and can be adjusted towards central excise liability in future. But dept. can object to get claim for total credit as civil works are not eligible for cenvat. Only machinery part suppliers ST/ Cenvat can be used. So, part of the ST paid on the advt. relevant to machinery part [ proportionate ] can be availed.

[Mahir S]

I agree and appreciate the reply to the query answered above.. Its a perfect and to the point reply..

[RAMASWAMY KRISHNAIYER]

The restriction on civil and other works are only for construction and works contract service .

I believe full credit is available on advt service

[MANDAVILLI RAMAKRISHNA]

yes. better to take entire input on advt. expenses and let the department decide during excise or service tax audit.

AI Summary

Input tax credit on advertising services can be claimed but may require proportionate allocation for machinery-related inputs.
Whether a manufacturing enterprise may claim Input Tax Credit on service tax paid for website advertising is disputed: one view permits credit but limits admissible Cenvat Credit to the proportion attributable to machinery-related inputs, while another treats advertising as fully creditable, and practical advice is to claim the full input and rely on audit scrutiny for any departmental objections.