Service Tax Credit Received on Resort Bill

[Ramesh M]

Dear Experts, 

We are manufacture of Engineering Goods, recently we conducted yearly operation meeting in a resort to discuss Manufacturing strategy and set targets.  We received Bill from Resort and they charged service tax. Can we take credit ??

Ramesh M

[YAGAY andSUN]

Dear Ramesh,

After the amendment in the definition of Input Services, it would be difficult to prove a nexus with such activities with manufacturing activities.  The phrases Business Activities, Such As, has been removed from the definition of input services w.e.f. 01-04-2011. It would be better, if you don't claim the service tax as CENVAT credit.

Please check the definition of Input services in this regard under the CENVAT credit Rules, 2004 as amended from time to time.

In case you need a written opinion on this matter, then, you may do contact us.  We do charge a nominal fees for our services.

Regards,

Team YAGAY & SUN

(Indirect Tax & Management Consultants)

AI Summary

Manufacturing Firm Advised Against Claiming CENVAT Credit on Resort Bill Due to 2011 'Input Services' Definition Change A manufacturing company inquired about claiming service tax credit for a resort bill incurred during a meeting to discuss manufacturing strategies. An expert responded that due to changes in the definition of 'Input Services' since April 1, 2011, it is challenging to link such expenses to manufacturing activities. The expert advised against claiming the service tax as CENVAT credit and suggested reviewing the CENVAT Credit Rules, 2004 for clarity. Further assistance is offered for a fee.