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

Cenvat credit utilization limited to post leasing taxable liabilities; nexus required and certain input credits are ineligible.
Cenvat credit may be applied only against output service liabilities arising after the taxable service is rendered; accumulated credits from periods without taxable services cannot be utilised. Credits with a direct nexus to the leased division (e.g., security, telephone) may be admissible, while manpower services lacking nexus to leasing are ineligible. Property taxes paid may be deducted from the gross value of leasing services when computing the taxable base, and export related input service tax may be recoverable via refund procedures.