Service tax input credit on abatement

[Naveen Sharma]

Dear sir,

i am working with rent-a-cab service provider company, we are claiming abatement of 60% and charging 40% of service tax from client (Individual or company), we are also receiving services from another rent-a-cab service provider who is also claiming abatement, can we take input credit of such service received against output service.

thanx in advance for quick response.

AI Summary

CENVAT credit entitlement for abated rent-a-cab services: input credit may be restricted unless notification conditions are satisfied.
Whether a rent-a-cab provider may claim CENVAT credit for input services received from another abated provider depends on the exemption and notification conditions: one amending notification permits input service credit subject to specified conditions, whereas the exemption provision bars credit where abatement on the gross value is availed. Credit availability therefore requires strict compliance with the conditions in the exemption/notification framework.