input credit of service tax paid on storage cost

[Guest]

One of my client is engaged in trading and services liable top service tax. The services mainly in the nature of repair & maint , installation etc. on which he claim and pay service tax , subject to input credit from sub contractor. He is also doing trading of sugar , grains for which he has taken warehouses on which , he pays service tax on storage cost. Can he claim input credit of storage cost charged by warehousing corporation.

AI Summary

Client Denied Cenvat Credit for Warehouse Storage Costs Under Cenvat Credit Rules, 2004; Not Used for Output Services. A client engaged in trading and services subject to service tax, including repair, maintenance, and installation, inquired about claiming input credit for service tax paid on warehouse storage costs for sugar and grains. Two replies clarified that the client cannot claim Cenvat credit for storage costs since the warehouse is not used for providing output services. The storage services relate only to trading activities and do not qualify as input services under the Cenvat Credit Rules, 2004. Therefore, the service tax paid on storage cannot offset the tax liability for repair, maintenance, and installation services.