Service tax credit availment on cctv cameras

[Guest]

Dear SIR, Can a manufacturer avail service tax credit on cctv cameras installed in the factory as a input service, pls give any reference regarding this, thanks and regards.

[YAGAY andSUN]

Dear Sandesh,

Please check and revert that how the installation of CCTV camera has the nexus with, in or in relation to the manufacturing of finished goods or output service. Further, how such services will be fit in the definition of Input Services.

Regards

YAGAY and SUN

(Management and Indirect Tax Consultants)

[Akash Deep]

Dear Sandesh,

For availing CENVAT Credit, three things need to be satisfied that service on which credit i sought to be availed must qualify as input services under CCR, 2004. such input services must be used in provision of out put service as defined under CCR, 2004 and there must be a reasonable nexus to prove that input services has actually been used in provision of out put service or in manufacture of excisable goods. if we look at the definition of input services as provided under Rule 2(l) of CCR, 2004, it provides that any services used by a manufacturer whether directly of indirectly, in or in relation to the manufacture of final products would qualify as input services. Moreover, inclusive part of the definition widens the scope further by including services used in relation to modernisation of factory or factory premises. term "modernisation" is of wide amplitude and includes not only activities resulting in enhanced production capacity of the factory but also includes other aspect which indirectly resulted in better management, administration of the factory. Installation of security cameras is certainly quality as modernisation of the factory or factory premises. Credit is rightly available to you. .

AI Summary

Cenvat credit for CCTV installations requires classification as an input service and a demonstrated nexus to output activity. CENVAT credit for CCTV installation is available if the service qualifies as an input service under the Cenvat Credit Rules, 2004 and there is a reasonable nexus showing use in manufacture of excisable goods or provision of an output service; the inclusive definition of input services covers modernisation of factory or premises, thereby encompassing security camera installations.