CENVAT CREDIT IN RENT A CAB

[Rajeev Khulbe]

GOOD MORNING TO ALL EXPERT,

WE ARE A EXCISABLE UNIT. WE HIRED BUSES FOR OUR EMPLOYEE UNDER RENT A CAB. WE DEPOSIT 40% SERVICE TAX UNDER WITH ABATEMENT. SIR MY MONTHLY PAYMENT OF SERVICE TAX UNDER RENT A CAB APPROX 20000 TO 30000 K. SIR CAN WE TAKE CENVAT CREDIT UNDER RENT A CAB. THANKS IN ADVANCE FOR YOUR QUICK REPLY

AI Summary

Cenvat credit on rent a cab: eligibility depends on abatement, vehicle classification and input service exclusion.
CENVAT credit on renting of motor cab services is conditionally allowable: full credit when the provider pays tax on an abated forty percent value, or credit limited to forty percent when the provider pays tax on full value; if abatement is inapplicable (for example where buses are used) tax treatment changes and parties may share liability. Renting of motor vehicles that are not capital goods is excluded from "input service," and the capital goods exception requires provider registration, creating a tension between exclusionary rules and notifications permitting credit.