Availment of Service Tax Credit

[Guest]

Dear Sir,

We are a mfg co, we situated at Head Office as a ISD can we avail service tax credit as a input service on following 1) hotel booking of any employee, 2) Hotel booking for any business exhibition, 3) Forax service - conversion of indian rupees to foreign currency for any employee foreign official visit. Please explain,please give us any reference regarding this, thanks and regards.

[DR.MARIAPPAN GOVINDARAJAN]

Dear Sir,

If the services mentioned by you relates and have a nexus with the manufacturing of your products then you can avail service tax credit.

Regards,

Dr. M. Govindarajan

[YAGAY andSUN]

Dear Sandesh,

In a recent judgment of Hindustan Coca Cola Ltd. CENVAT credit on Canteen services was allowed (even after the drastic change in the definition of Input Services w.e.f. 01-04-2011), since it had nexus with the manufacturing business of the appellant. In our opinion and as conveyed by Mr. Govindrajan, you can avail the CENVAT credit on such services if there is a nexus to manufacturing business of your company.

Regards,

Team YAGAY and SUN

(Consultants - Management, Business and Indirect Taxation)

AI Summary

Manufacturing firm seeks service tax credit on hotel bookings, exhibitions, and currency conversion; eligibility hinges on business nexus. A manufacturing company inquired about the eligibility to avail service tax credit for expenses related to hotel bookings for employees and business exhibitions, as well as foreign currency conversion for employee official visits. Two responses were provided. One stated that if these services have a nexus with the company's manufacturing activities, service tax credit can be availed. Another response referenced a court decision allowing CENVAT credit for canteen services due to its connection with the manufacturing business, suggesting that similar principles apply to the company's query if a nexus exists.