Cenvat credit-reg

[N Balachandran]

Sir,

 

When we provide both exempted services and taxable services and not maining the seperate records, what is the basis for calculation for  eligible Cenvat credit under the following circumstances:

1. The Service tax paid on input services when the corresponding output services are taxable

2. The Service tax paid on input services when the corresponding out put services are not taxable .

3. The service tax paid on  common input services when they used for both services exempted services and taxable services

My question are:

 

1. The Service tax paid on input services when the corresponding out services are not taxable,  Is it possible to take cenvat credit and adjust against tax payable on output services which are not related to this input  services?

2. Can we take the cenvat credit  when the Service tax paid on common input services and adjust against the  tax payable on output services? Is there any formula for calculation of Cenvat credit?

3. Is there any restriction for availing Cenvat credit and is there any specific services where are not eligible for Cenvat credit?.

4. The Service tax paid on input services  and the same has been adjusted against the corresponding out services which are taxable,  what will happend to the service tax paid on common input services.

 

Pl clarify

 

Regards

 

N.Balachandran 

.

[ALOK GUPTA]

Rule 6 (3) of Cenvat Credit Rule, 2004 prescribes the provision of availment & utilization of CENVAT Credit when a service provider provides both taxable & exempted services. I think, if you go through it you would find answers of all four questions. There is formula, there is provision to calculate the CENVAT Credit on proportionate basis & also there is provision to pay 5% (now 6%) of exempted service if you are unable to maitain the separate records. In case you find any difficulty after reading these provisions, you may feel free to ask any question. 

[N Balachandran]

Thanks for the clarification provided. 

AI Summary

Cenvat credit apportionment: rule requires proportionate allocation and alternative payment when separate records are not maintained. Rule 6(3) of the Cenvat Credit Rules, 2004 prescribes the availment and utilization of Cenvat credit when a provider renders both taxable and exempted services, sets a formula for proportionate allocation of credit on input and common input services, and provides an alternative payment mechanism where separate records are not maintained.