CENVAT Credit on Air ticket

[Pradeep Jain]

Dear Sir,

our Company, manufacturing unit and doing small amount of service tax on re-work and under RCM also , has been purchasing air ticket though Travel agent for the tour of our employee and consultants as well.

Now query is that are we eligible to avail CENVAT Credit -

(a) on service tax charged in the Air ticket ;

(b) on service tax on service charges charged by Air Travel Agent.

Regards

Pradeep Jain

[Rajagopalan Ranganathan]

Sir,

There are lots of case laws regarding the query raised by you. According to these decisions you are eligible to take credit of service tax paid on Air ticket charges and service charges charged by Air Travel Agent.

[KASTURI SETHI]

Sh.Pardeep Jain Ji,

If you can prove relationship between input service and output service, you can take credit otherwise it is not free from litigation. Whenever any assessee takes credit on the basis of case laws, it is not doubt-free as each and every case has different facts and circumstances. Trace out a ditto case and then analyse the situation whether you are able to establish relationship between input service and output service or in relation to manufacture of excisable product.

[Ganeshan Kalyani]

If credit amount is substantial and there are similar case law then credit may to taken but with risk of litigation. The department may not accept certain case laws. In that situation you will have to fight out the case with the help of an Consultant or inhouse tax person. Thanks.

AI Summary

CENVAT credit eligibility on air travel services hinges on establishing an input-output nexus, with litigation risk possible.
Eligibility to claim CENVAT Credit on service tax for air tickets and travel-agent charges depends on establishing a clear input-output nexus with taxable output or manufacture; while case law exists supporting credit, claims should be grounded in directly analogous authorities and accepted only with awareness of potential departmental challenge and litigation risk.