Availment of Service Tax Credit

[Guest]

Dear Sir,

We are Head office having centralised registration of a mfg co, in case of our dealers we are putting scheme in front of them that whoever who will make highest sale will be benefited for any hoilday package.So their stay in Hotels etc and service tax charged by such hotels can be available for us as a input service tax credit,IF yes please explain,please give us any reference regarding this,Thanks and Regards.

[PAWAN KUMAR]

Dear Sir,

As per my view, cenvat credit on services taken for consumption on employees for their personal use and travel benefits during their leave/holiday is out of the eligibility criteria, therefore cenvat credit will not be applicable.

[DR.MARIAPPAN GOVINDARAJAN]

If the expenses incurred is in relating to sales promotion then it would be eligible for taking credit.

[YAGAY andSUN]

Dear Sandesh,

Your company has pre-announced sales promotion policy and sales promotion phrase is duly incorporated in the definition of Input Service. Therefore, we do endorse the view of Mr. Govindarajan that CENVAT credit would be allowed on this basis.

Regards,

NeelamTaneja- Executive Consultant

(YAGAY and SUN - Management, Business and Indirect Tax Consultants)

[PAWAN KUMAR]

Dear Sir,

As per my view, the same has no nexus with the sale promotion. Therefore cenvat credit will not be applicable. If the marketing/sales person of the company visiting any place for sale promotion, their stays in hotels, would also in-eligible for cenvat as per the exclusion of Input services. These services being consumed on the employees.

AI Summary

CENVAT credit eligibility depends on nexus to sales promotion; personal employee holiday benefits are generally excluded. CENVAT credit eligibility for hotel stays awarded under a dealer sales-promotion scheme depends on nexus to sales promotion: if the scheme is a pre-announced part of sales-promotion and the expense qualifies as an input service, credit may be available; services consumed as personal employee benefits or travel are excluded from credit.