Service Tax Input Credit Utilized

[MUNIRAJ SRINIVASAN]

Dear Sir,

My client have Service tax Input credit  of Rs. 42 Lakhs and he had utilized for payment of excise duty, supt of central excise he wants what basis you have utilized and what provision kindly explain

[PAWAN KUMAR]

As per my view, Cenvat credit whether taken on Input, Capital Goods & Input services can be utilized for the payment of excise duty on goods or service tax on any output services as per rule 3(4) of the CENVAT Credit Rules,2004 under common pool.  

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Once the services on which credit is availed are in relation to the manufacturing either directly or indirectly, then, there is no restriction for its use and can be used for payment of excise duty as provided in the CCR 2004.

 

 

AI Summary

Cenvat credit can discharge excise duty or output service tax when services relate to manufacture under Cenvat rules.
Cenvat credit taken on Inputs, Capital Goods and Input Services is held in a common pool and, under rule 3(4) of the CENVAT Credit Rules, 2004, may be utilized for payment of excise duty on goods or service tax on output services; when the services on which credit is availed relate to manufacturing directly or indirectly, no restriction is placed on such use.