Service tax credit and applicability amount

[Vijay Chitte]

'A' contract with 'B' that, 'B' is providing a service in the fields of arrengemnt of travelling facility to 'A'. For that 'B' availed services from 'C' (Other travel agency) for hiring a Car/Motor car for providing service to 'A'. Now 'C' raise the bill to 'B' Rs.10490/- in the following manner. Gross Amount Rs.10000/- Service tax 4.9% Rs. 490/- ------------- Rs.10490/- ============= 'B' paid this amount to 'C'. And last B raise the bill to A including of his margne of Rs.1000/- in the follwing manner. Gross Amount Rs.11000/- (10000+1000) Service tax(12.24%) Rs. 1346/- ------------- Rs.12346/- ============== My Question:- 1)'B' acting as a Travel Agent for 'A' (service receipient)? 2) Can 'B' (Service provider)availe the 100% serivce tax credit which he paid to 'C' (Other travel agency)? If Yes, Any other obligation for 'B' (service provider)for availing service tax credit?

AI Summary

Can 'B' Claim Full Service Tax Credit for Payments to 'C' Under Cenvat Credit Rules, 2006? In a discussion forum, a user inquires about service tax credit applicability in a transaction involving three parties: 'A,' 'B,' and 'C.' 'B' provides travel arrangement services to 'A' and hires 'C' for car services. 'C' bills 'B' a total of Rs. 10,490, including service tax. 'B' then bills 'A' with an added margin and service tax. The question is whether 'B' can claim 100% service tax credit for the amount paid to 'C.' A respondent advises that 'B' can avail full credit of Rs. 490, assuming no exemptions or specific rules apply under the Cenvat Credit Rules, 2006.