service tax paid on manpower-clarification

[Ramakrishnan Seshadri]

Dear Sir,

We are manufacture of automobile parts.

For our Vehicles drivers are hired and supplied by manpower agency.

For this service tax has been paid under rcm previously and now we are paying 100%.

Now our question is whether service tax paid on this manpower for drivers is eligible for service tax credit.

Could any one clarify.

Thanks and Regards,

S.Ramakrishnan.

[PAWAN KUMAR]

Dear Sir,

Yes. Cenvat Credit of service tax paid on manpower agency is admissible and it is eligible input service as per rule 2(l)  of CENVAT Credit Rules, 2004.

[YAGAY andSUN]

Dear S. Ramakrishnan,

CENVAT credit on this transaction would be available to you even on payment of Service Tax alone without payment of Taxable amount as per the budget amendments.

Regards

YAGAY and SUN

(Management, Business and Indirect Tax Consultants)

[Ganeshan Kalyani]

Credit can be taken based on challan of tax paid under reverse charge. reverse charge is applicable only when the provider is individual, HUF, firm, AOP, BOI and the receiver of service is a company.

[Vijay kumar]

if the service in question i.e. drivers used for motor vehicles has nexus with your manufacturing activity, you can avail the credit in terms of rule 2(l) of CCR, 2004. Otherwise, you are not eligible.

[A J DEORA & ASSOCIATES]

Input credit on reverse charge is available for set-off after payment of RC service tax.

Ashok Deora

[Ramakrishnan Seshadri]

Dear Sir,

Thank you all for your reply. There is a small amendment in my above query id no.108577.

These drivers are hired for driving vehicles for directors and they will be driving the company vehilce to our customer plant with our directors and our staff.For this the service tax has to be paid. Whether this payment of service tax credit can be availed.

Could any body reply my query.

Thanks & Regards,

S.Ramakrishnan.

[PAWAN KUMAR]

Dear Sir,

From the agency you hired the drivers are issuing bill to you on account of manpower supply in form of drivers. The same is eligible for cenvat credit.

[Ganeshan Kalyani]

Hope your query is resolved.

AI Summary

Cenvat credit on manpower services: input service credit available where drivers' services have nexus and reverse charge paid. Service tax paid for drivers supplied by a manpower agency qualifies as an input service under rule 2(l) of the CENVAT Credit Rules, 2004 and CENVAT credit is admissible where the service has nexus with the manufacturer's taxable activity. Credit on services taxed under the reverse charge mechanism is available after payment of the reverse charge and can be taken on the basis of the challan; reverse charge typically applies when the provider is an individual, HUF, firm, AOP or BOI and the recipient is a company.