Ultilisation of cenvat for payment of service tax.

[Asked by 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: workshop equipment eligible while vehicles are ineligible; credit spread between initial year and subsequent years.
Cenvat credit is available for workshop equipment treated as capital goods with valid excise documents, while no credit is admissible on vehicles sold as such; capital goods credit is utilisable over time with part allowed in the year of receipt and the balance in later years. Service tax liability arises when charging for repair or maintenance services and does not apply to vehicle sales or typically to free services, so Cenvat may be used to offset service tax on charged workshop services.