Dear sir,
Our core business in trading and servicing of medical equipments. We received input credit by way of couriers charges, clearing charges paid for import equipment , AMC & labour charges involved in trading the medical equipments.
Our main issue is that we are not segregating the cost on the basis of tragding and service separately. can we take the service tax paid on account of above mentioned as input credit even if we are unable to distinguish between the trading / service.
thanks and regards
sridhar oruganti
Business Must Pay 5% of Trading Service Value or Reverse Credit Under Rule 6(3) of CENVAT Credit Rules A business involved in trading and servicing medical equipment inquired about claiming input credit for service tax on expenses like courier, clearing, AMC, and labor charges without segregating costs between trading and service. One respondent explained that trading is considered an exempted service, allowing only proportionate credit under the CENVAT Credit Rules (CCR), based on actual margin or 10% of sales value. Another respondent noted that since the business provides both taxable and exempted services, it must either pay 5% of the trading service value or reverse proportionate credit as per Rule 6(3) of the CCR. (AI Summary)
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