TaxTMI 
TaxTMI 
Clarification required on service tax paid Telephone bill, does it eligible for Cenvat credit ?
Clarification required on service tax paid Telephone bill, does it eligible for Cenvat credit ?
12 Apr 2017 
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Cenvat credit on telephone service allowed where nexus with taxable output or manufacturing is clearly established.
Telephone bills with service tax are eligible for Cenvat credit only if a demonstrable nexus exists between the telephone input service and the taxpayer's taxable output service or manufacturing activities, as per the definition of input service in the Cenvat Credit Rules, 2004. Administrative guidance and tribunal authority support credit where nexus is shown, but claimants should consider the risk of scrutiny and potential litigation when claiming small amounts of credit. (AI Summary)
Telephone bills with service tax are eligible for Cenvat credit only if a demonstrable nexus exists between the telephone input service and the taxpayer's taxable output service or manufacturing activities, as per the definition of input service in the Cenvat Credit Rules, 2004. Administrative guidance and tribunal authority support credit where nexus is shown, but claimants should consider the risk of scrutiny and potential litigation when claiming small amounts of credit. (AI Summary)