Cenvat credit of Service Tax

[Aitha RajyaLakshmi]

Sir,

Whether we can take the credit of Service Tax paid on Man Power engaged in different Schools as scavengers as a part of CSR Activity which mandates for a company under The Companies Act 2013.

AI Summary

Cenvat Credit Not Available for CSR Activities: Service Tax Credit Excludes Non-Business Related Expenditures Under Cenvat Credit Rules. A company inquired whether it could claim Cenvat credit for service tax paid on manpower engaged in schools as part of Corporate Social Responsibility (CSR) activities mandated by the Companies Act 2013. A respondent indicated that such activities are welfare-related and not directly linked to business manufacturing, thus credit may not be available. Another participant argued that compliance with the Companies Act should allow for credit, similar to other statutory compliance. However, it was clarified that CSR activities do not meet the criteria under the Cenvat Credit Rules (CCR) for service tax credit, which is allowed only when services are used in manufacturing or providing output services.