Availment of Service Tax Credit of Authorised Service station

[Asked by Guest]

Dear Sir,

We are a mfg co, we as a Head office are registered as Centralized under Service tax and as ISD, Can we avail Service tax credit of Authorized Service station in respect of vehicles which have been Serviced at such service stations. They bill in the name of our Company. Therefore please explain whether we can and please give any references regarding this.Thanks & Regards.

[PAWAN KUMAR]

Dear Sir,

No the same is not eligible as cenvat credit as per my view.

[Rajagopalan Ranganathan]

Sir,

As per rule 2 (l) (ii) (BA) of Cenvat Credit rules, 2004 service of general insurance business, servicing, repair and maintenance , in so far as they relate to a motor vehicle which is not a capital goods is not an input service. Hence you are not eligible to take credit of service tax paid by authorized Service Station.

As per rule 2 (a) (B) of Cenvat Credit Rules, 2004, 'Capital goods means motor vehicle designed for transportation of goods including their chassis registered in the name of the service provider, when used for-

(i) providing an output service of renting of such motor vehicle; or

(ii) transportation of inputs and capital goods used for providing an output service; or

(iii) providing an output service of courier agency

⁷[(C) motor vehicle designed to carry passengers including their chassis, registered in the name of the provider of service, when used for providing output service of-

(i) transportation of passengers; or

(ii) renting of such motor vehicle; or

(iii) imparting motor driving skills,

[YAGAY and SUN]

Dear Sandesh,

As described by Mr. Rajagopalan Ranganathan, in our view also such CENVAT credit would not available be available to you since such services do not fall under the definition of Input Services in the provisions of service tax laws.

Regards,

YAGAY and SUN

(Management, Business & Indirect Tax Consultants)

[Manoj Agarwal]

Dear Sir,

Agree with the reply of Mr. R. Ranganathan.

AI Summary

Service tax credit ineligibility: servicing of non capital motor vehicles does not qualify as input service, so credit cannot be claimed.
Servicing, repair and maintenance of a motor vehicle that is not a capital good is excluded from the definition of input service under the Cenvat Credit Rules, 2004; therefore service tax paid to authorised service stations for such vehicle servicing cannot be taken as Cenvat credit. The capital goods definition lists limited uses that may qualify a motor vehicle as capital goods; absent those uses the ineligibility applies to the centrally registered ISD/head office.