TaxTMI 
TaxTMI 
my client having dealership of vehicles (car). they has service tax liability in servicing work of cars. can he take credit of excise duty on spare part purchase ???? today they are not registered with excise
Credit of excise to be set off with service
17 Jan 2016 
7 Replies 
1446 Views Asked by
Excise credit on spare parts cannot be set off against service tax; service tax applies to labour and repair charges.
Excise credit on spare parts used in car servicing cannot be set off against service tax. Where spare parts are invoiced separately and VAT/sales tax is paid, they constitute a trading component excluded from service, precluding availment of excise duty credit. Service tax applies to the labour/repair or servicing charges, while spare parts fitted during service are not subject to service tax. (AI Summary)
Excise credit on spare parts used in car servicing cannot be set off against service tax. Where spare parts are invoiced separately and VAT/sales tax is paid, they constitute a trading component excluded from service, precluding availment of excise duty credit. Service tax applies to the labour/repair or servicing charges, while spare parts fitted during service are not subject to service tax. (AI Summary)