Service tax Credit on Capital goods

[Asked by Guest]

One of my client has invested in Windmill Project. The supplier has charged nearly Rs. 4.00 lacs as service Tax. Client is in business of Mfg. of engraved rollers. Its factory is in Ahmedabad. Wind Mill is at Jamnagar. He gets credit in his electricity bills for the units generated by his wind mill at jamnagar. Can he get credit of Service Tax cosidering the investment in wind mill as Capital Goods.

[Surender Gupta]

You can adopt the procedure of Input Service Distributor if input services received at Jamnagar is utilized for manufacturing of Engraved Rollers and sbject to other provisions of the Cenvat Credit Rules, 2004.

AI Summary

Input service distributor route enables pooling and apportionment of service tax credit for manufacturing use under Cenvat rules.
Whether service tax paid on services for a windmill at a separate location can be availed as credit for the manufacturer's output; the service tax may be pooled and apportioned by using the Input Service Distributor mechanism, provided the input services are used for manufacturing and all conditions of the Cenvat Credit Rules, 2004 for distribution, documentation and eligibility are satisfied.