CENVAT AVAILAMENT

[RAMESH ANANTHAKRISHNAN]

Dear Sir,

We are in synthetic filaments filed. We produce both exempted as well as dutiable final product. Whenever we produce dutiable finished goods we avail CENVAT credit on the inputs (raw material alone). During the operation we engage contract labours , securities, transport services for which we paid sizeable amount of service tax. Since we produce dutiable and exempted products (Notification 30/2004) we can't distinguish the services related to dutiable as well as exempted products production. Therefore except Raw material we do not avail CENVAT credit for service related matters. Kindly advise whether we can take service tax credit.

AI Summary

Company Can Avail CENVAT Credit on Services; Follow Rule 6(3) for Reversing Credit on Common Inputs A query was raised regarding the availment of CENVAT credit by a company producing both exempted and dutiable synthetic filament products. The company avails CENVAT credit on raw materials but not on services like contract labor, security, and transport due to difficulty in distinguishing between services for dutiable and exempted products. Two responses advised that the company can take CENVAT credit on service tax paid on input services and should follow the procedure in Rule 6(3) of the Cenvat Credit Rules, 2004, for reversing credit on common inputs used for both types of goods.