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

Proprietorship can claim CENVAT credit for business phone expenses; VAT credit not allowed for stationery, software. A proprietorship concern engaged in data-processing sought advice on claiming CENVAT credit for telephone expenses, including landlines and cellular phones in the proprietor's name, and VAT on expenses like stationery and software. The responses indicated that CENVAT credit can be claimed for service tax paid on telephone and cellular phone bills if they are used for business purposes, though proof may be required if the phone is in the proprietor's name. VAT credit is not available for such expenses as it is not specified under current regulations.