Provisions for availing cenvat credit for a manufucturer cum Service tax provider

[sunil mehta]

What are restrictions for a manufucturer cum Service tax provider in  Cenvat Credit Rule, 2004?(in context of input services credit taken as a manufacturer but utilsed in payment of ser.tax on commission income) i.e. what 'user test' we have to follow assuming that output services are taxable & finished goods mgf. are excisable?

[Vijay Chitte]

Dear Sunil, If you are manufacturer cum Service provider then you will have to maintain serparate records for taking and utilisation of cenvat credit. "As per defination of input service means, any service used by provider of taxable service for providing an output service", taking the veiw of input service defination, it is advisable that do not follow the procedure of input services credit taken as a manufacturer and utilized againt in payment of service tax on commission income, Becuase if input services are used in the manucturer fo final product you can utilize this serivce tax credit only on excise duty liabilty subject to the comliance of CC rule. Vijay Chitte-Claris

AI Summary

Input service credit restrictions require separate records for manufacturer cum service providers; credit generally applies only to excise liability. A manufacturer who also provides taxable services must maintain separate records for taking and utilising cenvat credit; input services used for manufacture can be credited only against excise duty and should not be utilised to discharge service tax on commission income without proper segregation and compliance with the Cenvat Credit Rules.