Regarding cenvat credit on service tax on rent a cab

[Rajeev Khulbe]

Good morning to all my great experts.

Every time when I face any problem.then you all my great experts help me. But yesterday experience I want to share with you. Yesterday our financial excise and service tax audit.then in one point more argument between audit team and us .that point was cenvat credit on rent a cab.auditor told us that why are you taking cenvat credit on rent a cab then we told us as per notification no.08/2014 service tax we can take cenvat credit on rent a cab because as per notification if we will DEPOSIT SERVICE TAX @40℅ on abated value on rent a cab then we can take credit on it. But Auditor told us that this rule for SERVICE provider not service receiver . He told that if service provider is private limited company then he will deposit 40℅ service tax not service receiver not deposit service tax.sir I want to know that auditor was right .can we not claim cenvat credit on rent a cab.

Thanks

Rajiv

Nainital

AI Summary

Reverse charge on renting motorcab: recipient may claim cenvat credit for tax paid under reverse charge subject to statutory limits.
Reverse charge liability for renting of motorcabs places tax on the recipient when the recipient is not in the same business; recipients who deposit tax under reverse charge may claim cenvat credit of the tax paid. Where the provider avails abatement the recipient pays on the abated value; where the provider does not avail abatement the tax may be shared between provider and recipient. Availability of input service credit is subject to a statutory ceiling and the interaction of abatement choices, producing limits on the quantum of credit the recipient may legitimately claim.