Renting of Immoveable Property

[Snehal Kulkarni]

Suppose, a person who has multiple Properties which he is providing to other person for commercial purpose. Since the scope of business is huge, he had a Office where all the acccounting of all these rentings are taken care. To run this office, he had taken various equipment ( Capital Goods ) including telephone, internet,computers, softwares, ACs etc. My question is whether the cenvat credit taken ( CVD,SAD etc ) on office equipment can be utilised for payment of Service Tax on the Output service ( renting of immoveable property ) ? Please guide with relevant case law/circular

[rishi mohan]

Definitely sir if the input services are wholly used for the business purpose then the credit for the same shall be taken. A relation should take place while availment of cenvat credit.

In the above case, cenvat credit of  input services on telephone, internet, computers, softwares, ACs shall be taken and same shall be utilised while making a payment of Service Tax on the output service.

AI Summary

Cenvat credit on business office inputs can be utilised against service tax on renting of immovable property.
Input tax credits on capital goods and input services may be availed and utilised against service tax on renting of immovable property only where those inputs and services are cenvat eligible and wholly used in the business of providing the renting service, with a demonstrable relation between the inputs/input services and the output taxable service.