CENVAT Credit of Service tax paid on canteen services and on bus hire charges

[Asked by Guest]

Sir, In case of a manufacturing unit where all products are excisable.Can We claim CENVAT Credit of Service tax paid on canteen services and on bus hire charges. Both these facilities are for the welfare of employees and service tax is paid to outside contractors.

[Surender Gupta]

Any input services which is not related to manufacturing activities, may be eligible for Cenvat Credit if it falls in the inclusive part of the definition of Input services (See Rule 2(l). Therefore, if these activities are related to business, cenvat credit is available.

[Madhukar N Hiregange]

It should be possible. There is already a decision on cvanteen being available.

'Inpur service' is defined as 'any service' as in rule 2(l) of Cenvat Credit Rule-2004 an any service used to manufacturer or service provider, directly or indirectly, in or in relation to manufature of final products. Hnec we can calim CENVAT Credit of Service tax paid on canteen services and on bus hire charges. Both these facilities are for the welfare of employees and service tax is paid to outside contractors. Canteen is provided by the company and charges incurred for running the same are born by the company. Hence the same is indirectly related to activities which are in relation to manufaturer of final products.

AI Summary

Cenvat credit for employee welfare services can be claimed where services are used in relation to manufacturing.
Whether CENVAT credit is available for service tax paid on canteen services and bus hire charges for employees. Under Rule 2(l) of the CENVAT Credit Rules, 2004, input service means any service used directly or indirectly in or in relation to manufacture of final products; services used for business and bearing a nexus to manufacturing qualify as CENVAT creditable. Replies indicate canteen services have been treated as available and that company-borne bus hire charges, indirectly related to manufacturing, may also be claimed.