Service tax paid on Foreign tour

[SNEHAL SHAH]

Sir,

Please brief about GST (2.58%) charge on foreign tour & can we awailed Cenvat credit on this ? please brief .

 

Sachin shah

[CA Rachit Agarwal]

With effect from Finance Bill 2011, definition of Input Service has been changed. Hence the travel benefits extended to employees primarily used for personal purpose or consumption of any employee, is excluded from the definition of Service Tax. Hence the Cenvat Credit would not be available on the said part explained if of such nature

[Alok Kumar]

Sir,

You can avail the CENVAT  Credit under the current CENVAT rules in case you are able to justify and proove that the said foregin travel is connected to the business / business promotion of the organisation you are working for.

thanks,

 

alok kumar

AI Summary

Cenvat credit on foreign employee travel may be disallowed if primarily personal; business trips require substantiation and proof. The Finance Bill 2011 excludes travel benefits primarily for personal use from the definition of Input Service, rendering the personal-use portion ineligible for Cenvat Credit. Credit remains permissible only where the taxpayer can substantiate that foreign travel was connected to business promotion or other bona fide business activities, with the claimant bearing the burden of proof and documentation.