Input service credit - Reg.

[vinay wakde]

We have hired Air Craft on rental basis for traveling purposes exclusively for the Directors of our company at various places for business purposes.  Kindly let us know whether we are eligible for taking CENVAT credit  on said   input service or credit shall be denied by the Department.    

Regards,

VINAY

 

AI Summary

Input service credit may be allowed for rented aircraft used for directors' business travel if agreement evidences business use.
CENVAT/input service credit for rented aircraft hinges on qualification as an input service under Rule 2(l): use in providing an output service or in relation to manufacture/clearance. If the aircraft is used for demonstrable business purposes, credit may be available. Contractual evidence that the service is for directors' business use is necessary, and uncertainty over whether the rental attracts service tax may affect entitlement.