TaxTMI 
TaxTMI 
WE ARE IN MANUFACTURING OF PHARMACEUTICAL PRODUCTS. WE ARE PROCURING ORDER THROUGH TENDER ON ALL INDIA BASIS AND THROUGH SEP UP OF AGENT ALSO. WE ARE PAYING SALES COMMISSION HUGE AMT WHICH IS APPLICABLE TO WITH SERVICE TAX . WE HAVE TAKEN CREDIT THE SAME SERVICE TAX AMT BUT IN LAST AUDIT EXCISE DEPT REVESED ALL THE AMT WITH PANELTY AND INTEREST WHICH HAVE PAID BY CASH ONLY. PLEASE HELP WHETHER WE CAN TAKE THIS SERVICE TAX CREDIT OR NOT.
CREDIT OF SERVICE TAX ON SALES COMMISSION
07 Mar 2012 
5 Replies 
8649 Views Asked by
CENVAT credit on sales commission admissible when nexus to manufacture is established; review contracts and audit grounds.
Manufacturer claimed CENVAT credit for service tax paid on sales commissions; audit reversed credits and imposed penalty and interest paid in cash. Board guidance treats sales promotion and commission services as creditable where conditions are met. The definition of input service includes advertisement and sales promotion used directly or indirectly in relation to manufacture and clearance. Credit thus appears prima facie admissible, subject to establishing nexus to manufacture and producing contractual and audit-related documentary evidence. (AI Summary)
Manufacturer claimed CENVAT credit for service tax paid on sales commissions; audit reversed credits and imposed penalty and interest paid in cash. Board guidance treats sales promotion and commission services as creditable where conditions are met. The definition of input service includes advertisement and sales promotion used directly or indirectly in relation to manufacture and clearance. Credit thus appears prima facie admissible, subject to establishing nexus to manufacture and producing contractual and audit-related documentary evidence. (AI Summary)