Cenvat credit of Service Tax

[Guest]

Whether Cenvat credit can be claimed on Service Tax paid on rent towards Guest House maintained by the Company in different Cities?

[Nash Industries I Pvt Ltd]

Credit of service tax paid on rent of guest houses not eligible as it is neither used in or in relation to manufacture of excisable goods or provision of output services.

[Ganeshan Kalyani]

The nexus of input credit with the output tax is absent and hence credit is not eligible. Thanks.

[YAGAY andSUN]

Earlier it was available. However, w.e.f. 01-04-2011 it is doubtful and such availment is prone to litigation. Nexus must be established as mentioned above.

[Himansu Sekhar]

Moreover when the word 'business' was removed from the ambit of rule 2(l) of CCR 2004

[YAGAY andSUN]

If high stakes are involved then there is no harm to seek an Advance Ruling or a representation may be submitted to CBEC and TRU.

AI Summary

Eligibility of Cenvat Credit on Guest House Rent Denied; Requires Clear Nexus Post-April 2011, Rule 2(l) CCR 2004 Cited. A query was raised about the eligibility of claiming Cenvat credit on service tax paid for rent on guest houses maintained by a company in various cities. Responses indicated that such credit is not eligible because the rent is not used in manufacturing excisable goods or providing output services. It was noted that after April 1, 2011, claiming this credit became contentious, requiring a clear nexus between input and output services. Additionally, changes in rule 2(l) of CCR 2004 further complicated eligibility. For significant amounts, seeking an Advance Ruling or representation to CBEC and TRU was suggested.