Eligibility of CENVAT credit

[VAMSI KRISHNA]

Sir,

if service provider opt for composition scheme avaliable under rule 7 of service tax rules 1994....... (air travel)....

my doubt is whether same is eligible for CENVAT credit to receiver or not????????

Thanks

AI Summary

CENVAT Credit Eligibility Under Composition Scheme for Air Travel Services Clarified; Conditions May Affect Credit Availability A participant queried about the eligibility of CENVAT credit for service tax under the composition scheme for air travel services. Respondents clarified that per Service Tax Rules, 1994, service providers opting for the composition scheme pay a fixed percentage of the basic fare as service tax, which does not restrict the availing of CENVAT credit. However, the credit can be availed by the service receiver if there is a clear nexus between input and output services. Conditions such as personal use of services may affect eligibility for credit.