TaxTMI 
TaxTMI 
An output service provider provides some output service as well as involved in trading of goods. For availment of Cenvat credit of Input service,whether Turnover of Trading of goods is treated as Exempted Service And in the case of Non maintenance of Books for availing the Input Service Credit (other than the 16 specified service) 6% of The Turnover of traded goods is required to be paid. Pl. explain and if possible pl. provide the relevant case laws. Thanks & regards
Turnover tratment - cenvat credit
25 Sep 2009 
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Cenvat credit treatment: trading turnover not a service, reverse or apportion credits when inputs used for trading.
Trading of goods is not a service and turnover from trading is not treated as an exempted service for Cenvat credit. If input services are not among the specified services and separate books are not maintained, the provider must prove direct nexus between input services and taxable output services; otherwise the six percent adjustment applies where relevant. When input services partly support trading activity, the service provider must reverse the credit attributable to trading or adopt an acceptable apportionment formula. (AI Summary)
Trading of goods is not a service and turnover from trading is not treated as an exempted service for Cenvat credit. If input services are not among the specified services and separate books are not maintained, the provider must prove direct nexus between input services and taxable output services; otherwise the six percent adjustment applies where relevant. When input services partly support trading activity, the service provider must reverse the credit attributable to trading or adopt an acceptable apportionment formula. (AI Summary)