Input service tax credit taken on ticket booking / travelling for coming up for interview

[Guest]

dear experts,

we are manufacturing units and i have a doubts regarding service tax credit (input service ) .

we are arranging ticket booking for persons who comes for interview . in this case , can we take credit of service tax ?

2) other issue for Ticket Booking and hotel bills of our pay roll employees who goes out for marketing purpose so in this context can we take avail service tax credit ?

3) last one is that if any employee who goes out for other branch for accounting purpose and stay at hotel so in this case can service tax credit avail on hotel bills and ticking booking service?

i read the definition of input service but it's not clarified that's y i am getting confuse.so pls. provide proper guideline.

pls, reply or clarification accordance pointwise.

regards,

Manan Pandya

ahmedabad

9510018659

[DR.MARIAPPAN GOVINDARAJAN]

Kindly inform whether you are rendering service or manufacture goods.

The new definition of 'input service' includes market research. If it comes under this you are eligible to avail credit. In case of other services if it have nexus with the providing of out services or manufacturing goods then it would be eligible for credit otherwise not.

[Guest]

dear sir,

we are manufactured goods which are dutiable so in this context pls.explain according to point wise.so i can understand easily.

[DR.MARIAPPAN GOVINDARAJAN]

(l) “input service” means any service, -

(i) used by a provider of output service for providing an output service; or

(ii) used by a manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and clearance of final products up to the place of removal,

and includes services used in relation to modernization, renovation or repairs of a factory, premises of provider of output service or an office relating to such factory or premises, advertisement or sales promotion, market research, storage up to the place of removal, procurement of inputs, accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating, share registry, security, business exhibition, legal services, inward transportation of inputs or capital goods and outward transportation up to the place of removal; but excludes,-

(A) service portion in the execution of a works contract and construction services including service listed under clause (b) of section 66E of the Finance Act (hereinafter referred as specified services) in so far as they are used for -

(a) construction or execution of works contract of a building or a civil structure or a part  thereof; or

(b) laying of foundation or making of structures for support of capital goods,

except for the provision of one or more of the specified services; or

(B) services provided by way of renting of a motor vehicle, in so far as they relate to a motor vehicle which is not a capital goods; or

(BA) service of general insurance business, servicing, repair and maintenance , in so far as they relate to a motor vehicle which is not a capital goods, except when used by -

(a) a manufacturer of a motor vehicle in respect of a motor vehicle manufactured by such person ; or

(b) an insurance company in respect of a motor vehicle insured or reinsured by such person; or

(C) such as those provided in relation to outdoor catering, beauty treatment, health services, cosmetic and plastic surgery, membership of a club, health and fitness centre, life insurance, health insurance and travel benefits extended to employees on vacation such as Leave or Home Travel Concession, when such services are used primarily for personal use or consumption of any employee;”

The above is the definition of input service. If the tour of the official is in regard to market research or sales promotion then the input service credit can be availed.

For the first query kindly clarify whether you are booking tickets for those who attended the interview; then you are a service provider. Kindly clarify as to the nature of the activity you are undertaking for the first.

[Guest]

thank you sir for your reply. but i am talking about my first query..

i am manufacturer , not a service provider but i make a ticket booking for the persons who comes for interview or recruitment from travelling agent and issue invoice including service tax so my query is that can i take service tax credit ...

regards,

manan pandya

[DR.MARIAPPAN GOVINDARAJAN]

Dear Sir,

Please call me so as to discuss about your first query. My mobile No. is 09486103193.

[YAGAY andSUN]

Dear Manan,

Such expenses pertain to recruitment which is very well incorporated in the definition of Input Services. You are eligible to avail the CENVAT credit on such expenses.

Regards,

NeelamTaneja(Executive Consultants)

YAGAY and SUN

(Management, Business and Indirect Tax Consultants)

[Guest]

Res. sir,

thank you so much you gave me a your precious time and sharing knowledge ...

i am so much happy to talk with you ... and i am lucky that i could talk with you and you have cleared my doubt.

thank you so much sir...

sir, may i request you , if you don't mind if i get in trouble or get any confusion then may i call you if you allow and give your time..if you are in office ..

so pls. inform when can i call you ?

regards,

Manan Pandya

Manan Pandya

[DR.MARIAPPAN GOVINDARAJAN]

Dear Sir,

You can call me at any time; don't hesitate.

Regards,

Dr. M. Govindarajan

[Mahir S]

Cenvat credit available in respect of serial no. 02 and 03, as it is for official purpose.

Cenvat credit admissible in respect of serial no. 01 only if the employee called for interview is recruited; however if called for interview and not recruited, then credit not admissible.

[YAGAY andSUN]

Dear Naveed,

If a candidate has been called for an interview but not recruited, then, in such scenario, what accounting treatment should be provided and where to debit such expenses? Certainly, in the head of recruitment expenses. Therefore, in our opinion, CENVAT credit would be allowed.

Regards,

Neelam Taneja (Executive Consultant)

YAGAY and SUN

(Management, Business and Indirect Tax Consultants)

[DR.MARIAPPAN GOVINDARAJAN]

Yes, I agreed with the views of Shri Pradeek Kahtri.

AI Summary

Input service credit for recruitment and official travel: recruitment, marketing and business travel expenses may qualify for CENVAT credit. Whether service tax credit (CENVAT credit) is admissible depends on whether the expense is an input service used by a manufacturer in or in relation to manufacture or clearance; recruitment, market research, advertising and sales promotion are named inclusions, so ticket booking and travel for recruitment and bona fide marketing or inter branch official travel generally qualify for credit, subject to statutory exclusions for services used primarily for personal employee use and other specified exceptions.