Utilisation of Cenvat Credit

[kiran pai]

Dear Sirs,

We are the manufacturer of textile fabrics  having manufacturing unit at Silvassa and registered office at Mumbai. We had some let out property in Mumbai and around Maharashtra.  We have opted for  centralised registration certificate of Service Tax for GTA and Renting of Immovable Property service.  Now our queiry is,  can we avail the cenvat credit from the input credit and input service credit.  If yes shall we utilise the said cenvat credit for the payment of Service Tax on the Renting of Immovable property service for the concerned month.  Please reply me.

Thanks,

Kiran Pai. 

[YAGAY andSUN]

Dear Kiran,

You can avail the CENVAT credit or through ISD you can distribute it to the dutiable manufacturing units .  Service Tax pertaining to outward GTA is required to be paid in cash.  No adjustment is allowed via CENVAT credit account.  CENVAT credit  paid on input taxable service i.e. on Renting of immovable property service can be  utilized for payment of output liability.

Since the definition of the Inputs,Input Service and Capital goods have been amended w.e.f. April'2011, therefore, you should be extra Conscious while availing CENVAT credit especially on Input services.  Even wrong availment will be treated at par with wrong utilization and interest & penalty will be levied/imposed on your company.

Best Regards,

 

Pradeep Khatri

 

AI Summary

Textile Manufacturer Clarified on CENVAT Credit Use for Renting Services; Cautions Advised on Recent Amendments. A manufacturer of textile fabrics, with a manufacturing unit in Silvassa and properties in Mumbai and Maharashtra, inquired about the utilization of CENVAT credit for service tax on renting immovable property. The company holds a centralized registration for service tax related to GTA and renting services. In response, it was clarified that CENVAT credit can be utilized for the payment of output liability on renting services, but not for outward GTA, which must be paid in cash. It was also advised to be cautious with CENVAT credit claims due to recent amendments, as incorrect claims could result in penalties.