TaxTMI 
TaxTMI 
Service tax credit on mobile phones
09 Feb 2007 
2 Replies 
1155 Views Asked by
Guest 
Cenvat credit on employee mobile bills may be claimed where business use is proven, with personal use apportioned.
The central point is that Cenvat Credit under rule 2(l) of the Cenvat Credit Rules, 2004 is available for an input service (mobile phone service) if it is used to provide an output service; the company must prove business use. In practice credit is often claimed where usage is official, but a prudent approach is to apportion and deny a reasonable percentage for personal use before availing credit. (AI Summary)
The central point is that Cenvat Credit under rule 2(l) of the Cenvat Credit Rules, 2004 is available for an input service (mobile phone service) if it is used to provide an output service; the company must prove business use. In practice credit is often claimed where usage is official, but a prudent approach is to apportion and deny a reasonable percentage for personal use before availing credit. (AI Summary)
Our client has taken mobile phone connections for its employees under corporate connection policy. The bills are in the name of the employee. Our client is bearing mobile phone charges. Can our client claim Cenvat Credit in respect of service tax paid on mobile phone charges?