Service Tax accumulated and set off

[Ashok Chopra]

Respected Forum,

I am multi unit company engaged in the following business:-

1. Manufacturer Exporter of Readymade Garment

2. Manufacturer Exporter of Wooden Furniture

3. Service Provider of Paint Coated on Auto Parts

Name of the company is same like M/s ABC Pvt. Ltd. (Garment Division) , M/s ABC Pvt. (Furniture Division) and M/s ABC Pvt. Ltd. (Coating Division).  Service tax number is one and service tax return is being filed one for all.

A lot of service tax amount is lying balance in return for the payment of Man Power Services, Security Service and Telephones etc. etc.

Now i want to give entire Coating Division on Lease.

I will charge Service Tax of Lease amount from Lessee.

Can i adjust  the amount now charged from Lessee from the outstanding amount of Service Tax in the books? or i should deposit the amount of service tax charged from Lessee

Please guide me accordingly.

 

If there is any notification or clarification, please provide me.

AI Summary

Company Seeks Guidance on Adjusting Service Tax for Leased Division; Experts Cite Rule 2(1) and Notification 29/2012-ST. A multi-unit company engaged in manufacturing and service provision seeks advice on adjusting service tax for its divisions. The company, planning to lease its Coating Division, inquires if it can offset service tax charged from the lessee against accumulated service tax credits. Aninda Roy suggests adjusting inputs related to the Coating Division and refers to Rule 2(1) and notification 29/2012-ST for guidance. Rajesh Nathoo advises that accumulated Cenvat Credit cannot be used for periods without taxable services and suggests refund procedures for ineligible credits like manpower services. Pradeep Khatri concurs with Rajesh's advice.