Cenvat Credit in respect of Input services and vat

[Guest]

'A' is a proprietorship concern doing data-processing work. Query is with respect to whether CENVAT credit can be claimed on the following : a) Telephone expenses for landlines used in office and connection in personal name? b) Cellular phone in name of proprietor? c) VAT paid on expenses like stationery, printing, computer repairs, software purchased etc? Many thanks for your assistance !!

[Surender Gupta]

For the purpose of service tax, you can avail Cenvat Credit against service tax paid on Telephone Bills and Cellula phone. However, where the phone is in the name of proprietor, you can calim the credit but if question is raised, you have to prove and satisfy the department that the same is being used for the purpose of business. Currently there is no facility for availing the credit against VAT (sales tax)

[Madhukar N Hiregange]

All servcies used for providing the taxable servcies are eligible. Telephone and cell phone would be eligible. VAT not allowed as not specified.

AI Summary

Cenvat credit on input services: telephone and cellular bills eligible, VAT not admissible; proprietor must prove business use. Cenvat credit is available for input services used to provide taxable services, including telephone and cellular phone charges, but where connections are in the proprietor's personal name the proprietor must demonstrate business use to satisfy the department; VAT (sales tax) on stationery, printing, repairs or software is not admissible as Cenvat credit.