cenvat credit

[Anil Jangid]

I need a suggestion for Cenvat Credit taken against Excise Duty Payable.

1.Service Tax Paid on Factory Machinery AMC Charges.

2.Service Tax Paid on factory Rent Charges.

3.Service Tax Paid on Purchase & Installation Service of Capital Goods.

4.Service Tax Paid on Professional Services.

5.Service Tax Paid on Inward/Outward Cartage Charges.

[YAGAY and SUN]

Dear Anil,

In our view, on All services as mentioned from point no 1 to 5 (1) i.e. inward cartage except on point 5 (2) i.e. outward cartage charges, you can avail the CENVAT credit on Input Services.

Regards,

YAGAY and SUN

(Management, Business and Indirect Tax Consultants)

[CS RAHUL AGARWAL]

Even for the item appearing at point no. 5.(2) i.e the outward transportation shall be available for credit subject to the actual fact of particular case. the charges by way of transportation incurred upto the place of removal shall be admissible. Conversely, the GTA charges paid on outward carriage on / after the place of delivery shall not be allowed to be claimed as credit. Varies form case to case and to the facts of case.

[Ganeshan Kalyani]

I agree with the views submitted by the experts.

[CSSANJAY MALHOTRA]

Friends,

Just have a look at Point No 2 (Service Tax on factory Rent) which needs review in relation to output service.

[YAGAY and SUN]

Dear All,

On point 5 (2) i.e. outward cartage charges, following judgment is relevant where in it was decided that Buyer's place cannot be a place of removal.

2015 (10) TMI 613 - SUPREME COURT Commissioner of Customs and Central Excise, Nagpur Vs M/s Ispat Industries Ltd.

Regards,

YAGAY and SUN

(Management, Business and Indirect Tax Consultants)

 

[Mahir S]

For availing CENVAT credit, one to one correlation is not necessary.

However, it should be ensured that the input service in respect of which the CENVAT is availed should be in relation to provision of manufacture of finished goods / taxable output service.

[CSSANJAY MALHOTRA]

Friends,

Already request for review of Point No 2 (Input Credit on Renting),as my view point for the present case varies.

Secondly in relation to Point 5(2), am in agreement with CS Rahul Aggarwal and to support, CBEC Circular No. 988 dated 20.10.14 is attached herewith which is followed after SC decision in case of Escorts. Point No 6 of Circular No 988 is important for determination of place of removal.

http://www.cbec.gov.in/htdocs-cbec/excise/cx-circulars/cx-circulars-2014/988-2014cx

[Mahir S]

Sanjay ji,

I agree with Yours and Rahul ji's views in respect of Point No. 5 (2).

[Suryanarayana Sathineni]

The views expressed by our learned friends are correct, except, the following:

1. Though the listed services are eligible for credit including outward freight up to the place of removal ( if it is on FOR basis) but it would be advisable that nexus between the MFG operations and the list of services required to be established.

2. Further, I am afraid that the Judgment in ISPAT case was in a different situation and related to earlier period ( before place of removal included in Cenvat Rules)

Regards

Suryanarayana

AI Summary

Cenvat credit on input services allowed subject to nexus with manufacture and place of removal limits for outward freight.
Cenvat credit on listed input services is available where a nexus with manufacture or taxable output service is shown; one to one correlation is not necessary. Outward freight is admissible only up to the place of removal, with determinations of place of removal and admissibility to be made on the facts and guided by precedent and CBEC Circular No. 988/2014. Credit for renting of premises requires case specific review relative to output service.