Discharging of service tax liability against Cenvat credit

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1. Can a mfg. co. discharge its service tax liability by debiting in Cenvat credit account ? Co. wants to avail 75 % abatement. Manoj

AI Summary

Manufacturing firm can use Cenvat credit for service tax if non-availment declaration is filed; cash payment recommended. A manufacturing company inquired about discharging its service tax liability by debiting its Cenvat credit account while seeking to avail a 75% abatement. The response indicated that availing the 75% deduction is feasible if the declaration of non-availment of credit exists. It is possible to use Cenvat credit for payment of freight liability, but there may be issues regarding the use of input services to pay for liability on input services. Practically, it is suggested to pay in cash and avail the credit immediately.