Cenvat credit on sales commission under protest

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Currently the cenvat credit on sales commission is not allowed as credit being under dispute and hence cenvat credit cannot be availed on the same. Therefore the service tax charged by the commission agents is not availed as credit and is transferred to deposit under protest account. Whether it is mandatory to inform Department regarding the Cenvat credit under question and transferred to protest account in books. If yes, what is the procedure, on yearly basis? And whether before or after entry in books.

AI Summary

Debate on Cenvat Credit for Sales Commission: Input Service Status and Impact of Conflicting Rulings Explored. A discussion forum addresses the issue of availing Cenvat credit on sales commission, which is currently under dispute. Participants debate whether it is necessary to inform the tax department about Cenvat credit transferred to a protest account. Some argue that sales commission qualifies as an input service under the Cenvat Credit Rules, 2004, while others highlight a Gujarat High Court decision disallowing such credit. The forum discusses the implications of conflicting court rulings and the necessity of informing the department to safeguard the right to future credit. Participants suggest various strategies, including reversing credit under protest, to navigate this legal uncertainty.