Service tax Credit

[Pradeep Kumar]

Dear All

Question : Company A is taking AMC charges of following

a) IT software savior model (Used for attendance marking)

b) Maintenance of Machines

c) UPS etc.

Should we claim the credit of service tax if charged by service provider?

Input Service definition inclusion and exclusion part not covering the same.

Kindly reply on the above query?

Regards

Pradeep

[DR.MARIAPPAN GOVINDARAJAN]

Whether you are a service provider or a manufacturer?

[Pradeep Kumar]

Sir

Company A is Manufacturer.

Regards

[Rajagopalan Ranganathan]

Sir,

According to rule 2 (l) of Cenvat Credit Rules, 2004, “input service” means any service, -

(i) used by a provider of ²⁶[output service] for providing an output service; or

(ii) used by a manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and clearance of final products upto the place of removal.

Since A is a manufacturer all the services mentioned by you will be in relation to the manufacture of final products. Therefore you are eligible to avail the credit of service tax paid on the input services received by you.

[DR.MARIAPPAN GOVINDARAJAN]

I endorse the views of Shri Rajagopalan

[Ganeshan Kalyani]

I also agree with the experts. To be cautious check the taxability of your products.

AI Summary

Input service credit entitlement for manufacturers: service tax on AMC, machine maintenance and UPS may be claimed.
Services such as AMC for IT software used for attendance marking, maintenance of machines and UPS, when used by a manufacturer "in or in relation to the manufacture of final products and clearance of final products up to the place of removal," qualify as input service under the Cenvat Credit Rules and are ordinarily eligible for credit of service tax paid.