CENVAT credit on service tax paid by commission agent

[Yatin Bhopi]

We have a parent company and affiliates in USA and other countries. We find buyer in India, negotiate price, follow up for payments for our parent company and affiliates and get commission.

Likewise overseas affiliates also under take similar activity for us.

After amendment in definition of ‘intermediary’ vide notification No 14/2014-ST / 11.07.14 commission agent of goods included in definition of intermediary. Now as per Rule 9 of POPSR 2012 place of provision of service is location of service provider hence where we are providing service to USA we are liable to pay service tax.

My query is: Are we eligible to avail CENVAT credit on service tax charge in the bill and paid to the govt?

2- Since our main activity is the manufacturing, all input services credit related to manufacturing activity is used towards payment of excise duty only, can we use this input service credit for discharging the liability against service tax payable on Indenting commission?

AI Summary

CENVAT Credit Denied for Commission Agent Services After Gujarat High Court Ruling; Appeal Pending in Supreme Court A business involved in manufacturing and commission-based activities in India sought clarification on whether they could claim CENVAT credit for service tax paid to commission agents, especially after amendments to the definition of 'intermediary'. While previous tribunal decisions allowed such credits, a Gujarat High Court ruling in the Cadila Healthcare case determined that commission agent services are not eligible for CENVAT credit. Although an appeal is pending in the Supreme Court, the Gujarat High Court's decision currently stands. The query was addressed by a management and tax consultancy team.