Utilisation of excise duty for the payment of service tax.

[Guest]

An authorised service station which purchases spares from manufacturer vide excise invoice. Can the credit of excise duty paid be used in paying service tax on bills raised for repair of vehicles if the cost of spares is not included in calculating taxable services.

[Surender Gupta]

Obviously not, if the value of spares are not included in the value of taxable services, you are not entitled to avail Cenvat Credit of Excise Duty paid on such spares.

AI Summary

Cenvat credit entitlement denied when excise-paid spares are excluded from the taxable value of services. Cenvat Credit of excise duty paid on spare parts cannot be used to pay service tax where the cost of those spares is excluded from the taxable value of the service; entitlement to utilise such credit depends on inclusion of the spares' value in the assessable value of taxable services.