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.

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.