service tax credit on rent a cab service eligble-reg

[Ramakrishnan Seshadri]

Dear Sir,

We are manufacturer of automobile parts and having 3 plants situated at different places. We have entered into contract with the transport service providers for transporting our staff from specific points to our units. The transporters are registered with the service tax department and we are discharging service tax for the 40% of the bill value.

Now our question is whether service tax paid on rent a cab service is eligible or not.if not what is the reason

Could anybody give us opinion .

Thanks & Regards,

S.Ramakrishnan

AI Summary

Automobile Parts Manufacturer Denied Service Tax Credit on Employee Transportation Under CENVAT Credit Rules 2004 A manufacturer of automobile parts inquired about the eligibility of service tax credit on rent-a-cab services used for employee transportation. The first response referenced the CENVAT Credit Rules 2004, indicating that credit is not eligible for services related to motor vehicles, as they fall under Chapter 87 of the Central Excise Tariff Act. The second response highlighted that expenditures on employee transportation and similar benefits are generally not eligible for CENVAT credit, as they are considered non-essential or wasteful by the department's perspective.