Ultilisation of cenvat for payment of service tax.

[Guest]

we are a authorized motor vehicle dealer.we purchase the vehicles from the manufacturer and sell it to customers.we also purchase equipments for our workshop.we are liable to pay service tax on the vehicles serviced.can we avil the cenvat credit to pay the service tax? in which manner?

AI Summary

CENVAT Credit Eligible for Workshop Equipment, Not Vehicle Sales; Service Tax on Charged Services Only, Not Free Services. A motor vehicle dealer inquired about using CENVAT credit to pay service tax on vehicles serviced. One response clarified that equipment purchased for workshop services is eligible for CENVAT credit, while buying and selling vehicles is not subject to service tax but may be subject to VAT. Another response noted that CENVAT credit is available for capital goods, with 50% credit in the first year and the remainder in subsequent years. It was also mentioned that service tax applies when charging for services, not during free services.