Availment of Service Tax Credit

[Asked by 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 and SUN]

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

Service tax credit where input services demonstrably nexus to manufacturing allows credit for travel, exhibitions, and forex services.
CENVAT/service tax credit is available for input services where those services bear a nexus to the taxpayer's manufacturing activities. Services such as hotel accommodation for employees, hotel bookings for business exhibitions, and foreign exchange conversion services may qualify if they can be shown to be connected to the manufacture of goods; the operative criterion is a demonstrable factual nexus to manufacturing before claiming credit.