Input credit of service tax - commission agent

[SHANTI NARAIN]

one of our client is a commission agent. He has raised their Ist service invoice during February 2007 relating to the services rendered for the period January 07. Though the company has incurred certain expenditure during November 06 and December 06, however, no invoice has been raised. Please advise whether company can claim input service tax credit on expenditure incurred during November 06 and December 06, for which no income has been earned.

AI Summary

Company Can Claim Input Service Tax Credit for 2006 Expenses if Linked to January 2007 Services Under Cenvat Credit Rules. A client, acting as a commission agent, raised their first service invoice in February 2007 for services rendered in January 2007. They incurred expenses in November and December 2006 but did not raise any invoices during that period. The query seeks advice on whether the company can claim input service tax credit for these expenses despite no income being earned at that time. The response indicates that if there is a connection between the expenses incurred in late 2006 and the services provided in January 2007, the company can indeed claim the cenvat credit.