AUDIT QUARY

[Guest]

R/sir, We are Manufacturing unit & Credit taken on Manpower consultant Invoice & same utilise it for production ( final product ) despatch . Is it valid or not ? Regards, SNEHAL SHAH

[rishi mohan]

With reference to the definition of "input service" under Cenvat Credit rules

"input service" means any service,-

       (i) used by a provider of taxable service for providing an output service; or

       (ii) used by the manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and [clearance of final products, upto the place of removal],

      and includes services used in relation to setting up, modernization, renovation or repairs of a factory, premises of provider of output service or an office relating to such factory or premises, advertisement or sales promotion, market research, storage upto the place of removal, procurement of inputs, activities relating to business, such as accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating, share registry, and security, inward transportation of inputs or capital goods and outward transportation upto the place of removal;

Hence availing credit on manpower consultant invoice is valid.

AI Summary

Input service: Cenvat credit allowed on manpower consultancy when used in manufacture and clearance of final products. The definition of input service under the Cenvat Credit rules includes services used by the manufacturer, directly or indirectly, in or in relation to the manufacture of final products and clearance of final products up to the place of removal, and expressly lists recruitment and similar business services; accordingly, credit on manpower consultant invoices used in production and clearance is covered as an input service.