Cenvat credit on sales commission under protest

[Asked by Guest]

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

Cenvat credit on sales commission: treat commission-agent services as eligible input service, with protest reversals advised where precedent conflicts.
Eligibility of cenvat credit on sales commission depends on whether commission-agent services qualify as input services used in or in relation to manufacture and clearance of goods as business auxiliary services. CBEC guidance treats commission services as sales promotion eligible for credit; however conflicting appellate and high court rulings, notably from one jurisdiction, have led to departmental demands. Practitioners therefore advise options: take credit and keep unutilised; take and reverse under protest with departmental intimation; or refrain from availing credit depending on local precedent and limitation risks.