Service tax credit for SSI Unit

[sukhvinder singh]

Dear Sir ,

Please clear if a assessee is working under SSI Exemption , what about the Service tax credit during that period, please provide with relative case law and notifiction

 

Thnaks

[rajavel calaimany]

Dear Sir,

You are not eligible to avail any cenvat credit when you are availing the value based SSI exemption. However when you cross the threshold limit of Rs.1.5 Crores you can avail the credit of service tax paid on services received on or after the date of crossing the threshold limit.

 

By

cals

[RadheyShyam Mangal]

There are divergent views on availment of service tax credit during SSI Exemption. Recently Ahd Tri has held that there is not bar of taking credit of input service during SSI exemption. However the department still may not agree and can give SCN on this.

AI Summary

Service tax credit during SSI exemption may be denied until threshold is crossed, despite a conflicting tribunal view.
Entitlement to service tax credit while availing the SSI exemption is contested. The stated operational position is that an assessee availing the value based SSI exemption cannot claim cenvat credit during the exemption period; upon crossing the turnover threshold, credit is available only for services received on or after the date of crossing. A tribunal has held there is no bar to input service credit during exemption, but the department may issue show cause notices challenging such claims.