Claiming service tax on subsidized services allowed??

[nilesh prithani]

Hi!!

We are a service oriented company in Hyderabad and recently in our annual audit we were disallowed credit for the below service tax we claimed:

1. Restaurant Bills (staff and management reward)

2. Hotel Bills (training session)

3. Transport (for raw materials)

Issue is that the auditor told us that we cannot claim service tax amount on any services where the service tax is not completely 15% on the basic amount.

Please suggest!!

Thanks!!

Nilesh Prithani

AI Summary

Dispute Over Service Tax Credit on Partial Payments: Clarification Needed on Restaurant, Hotel, and Transport Bills. A service-oriented company in Hyderabad faced an issue during an audit where they were disallowed service tax credit on restaurant, hotel, and transport bills. The auditor claimed that credit cannot be claimed if service tax is not fully 15% on the basic amount. Responses varied: one participant suggested there are no restrictions on credit if service tax isn't paid on the entire amount, while another agreed with the audit's restrictions but sought clarification on certain points. It was noted that credit might be allowed if the bills are in the company's name and linked to company activities.