EA 2000 Audit Query

[Laxmaiah Vanamamula]

Dear sir,

we have Manufacturing Unit in Suryapet and liesen office in Hyderabad,

We have a problem in EA 2000 in our Factory,

problem is Liesen offoce address is in Service Tax Input Credit Bills (like, Service Bills, Telephone bills and Courier bills) the service tax already credit taken by us,

 The Audit Officer says  the liesen office address invoices are not taken to credit,

so, please clarify the above Service bills - Service tax credit taken availble or not,

Thanking you,

from,

Laxmaiah Vanamamula,

[Snehal Kulkarni]

In our view, the point raised by the Audit Team seems to be correct.

Please go through rule 4(a)(1) of Service Tax Rules,1994. The Invoice raised by the Service Provider should be in the name of Service Recipent Only. If your manufacturing is receiving the services, then the Invoice should be addressed to Manufacturing Unit.

In such cases, you should ask permission from AC.

 

 

[Radha Arun]

if the telephones are in the manufacturing unit, then the credit can be taken even if the billing address is different. Similarly if the courier receipts show that the services were used by the manufacturing unit, the credit can be taken. There is sufficient case law for this.

For the future  it is better to take registration for your city office as input service distributor.

AI Summary

Service tax input credit: invoices must name the recipient; evidence of actual use can preserve credit. Service tax input credit may be denied if invoices are not in the name of the service recipient at the place where services are used; Rule 4(a)(1) requires invoices addressed to the recipient and credits challenged in audit may be regularized only with assessing officer permission. However, credits for telephones and courier services remain claimable if evidence shows the manufacturing unit actually used the services despite a different billing address, and registration of the city office as an input service distributor is recommended for proper allocation.