Cenvat Credit of Input Service tax on Rent of office

[TEJASWINI BELOSE]

Can we avail and utilize Cenvat Credit of Service tax on rent of office in a manufacturing industry?? Whether Input Service tax paid for Office rent can be utilized for Payment of Output Service tax ??? Is it directly or indirectly related to manufacture of products in manufacturing Industry???

[Rajagopalan Ranganathan]

Gentlemen,

In my opinion service tax paid on Rent paid for office will not be allowed as credit since it do not have any nexus with manufacture of final products. However, service tax paid on rent paid to factory premises where the final products are manufactured will be eligible for credit.

[Mahir S]

Sir,

Office rent is not eligible for input credit . Also it has not been specifically discussed or allowed under the input service credit definition.

[YAGAY andSUN]

In our opinion, it will be available since, all tactical decisions, planning, Budgeting, etc pertaining to manufacturing are taken in the such offices, therefore have nexus with the finished goods.

[Ganeshan Kalyani]

Yes credit is eligible.

[A J DEORA & ASSOCIATES]

Input credit on Rent paid is allowed. Earlier, the Department is used to take a stand that credit cannot be allowed.

AI Summary

Cenvat credit on office rent questioned over nexus to manufacture; practitioners offer conflicting views on eligibility and use. Question whether Cenvat credit of service tax on office rent in a manufacturing enterprise is admissible and utilisable against output service tax; opinions diverge: some say office rent lacks nexus with manufacture and is ineligible while rent for factory premises is eligible; others argue office functions supporting manufacturing create sufficient nexus and therefore credit is allowable. The text records practitioner opinions and no binding adjudication.