Service Tax Credit

[Abdul Razack Basha]

Dear Sirs,

Please advise for Service Tax credit eligibility against Canteen Contract Payment and Employee Transport Bill. We are receiving Invoice from the 1) Canteen Contractor and they are charging Service Tax on 60 percent of the value, is it eligible for Credit and 2. Employee transport, we are paying service tax as per recipient rule 40 percent of the value ie. 4.944 percent , is it eligible for Service tax credit. Please clarify.

Thanks & Regards

B. Abdul Razack

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AI Summary

Canteen Contracts and Employee Transport Bills Ineligible for Service Tax Credit Under CENVAT Credit Rules 2(l)(B) and 2(l)(C). A discussion on service tax credit eligibility for canteen contract payments and employee transport bills raised questions about the applicability of CENVAT Credit Rules, 2004. Responses indicated that under Rule 2(l)(C), outdoor catering is excluded from input services, making canteen contract payments ineligible for credit. Similarly, employee transport services do not qualify as passenger transportation under Rule 2(l)(B), thus ineligible for credit. However, references to legal precedents suggest potential eligibility for certain transport services if linked to manufacturing processes. The discussion reflects differing interpretations and advises on potential legal challenges.