telephone bill And other service tax bill

[Guest]

Dear  Khatri sir

We are manufacturing machinery for pharmaceutical product and take excise registration in april2012, service tax registration will be registration next month.  My question is can we take service tax credit on telephone  bills and other service purchase in RG 23 part II for utilisation of final product?..

Please guide.

Regards

Manoj Raut

[YAGAY andSUN]

Dear Manoj,

Please check the definition of input services and if services received by you, are in relation with, directly or indirectly manufacturing of dutiable finished goods or taxable output services, then, you can avail the CENVAT credit on Input Services after the date of getting the registration Certificate from the Service Tax Department.

Regards,

Pradeep Khatri

[CA Rachit Agarwal]

Please note that the definition of "input service" has been changed in the Finance Act, 2011. Word "business" has been removed from the definition of input service. Earlier all the input services related to business was allowed as the cenvat credit and the sames was confirmed by vari ous Suprem Court rulings such as Ultra Tech Cement.

However after the amendment it is not advisable to avail cenvat credit on inputs such as telephone bills until unless it could be justified that the final product/ouput service has utilized the such inputs during the course of performance.

[rajkumar shukla]

Registration under service tax law is not required for availing cenvat credit. it may be required for paymant of service tax

AI Summary

Eligibility for CENVAT Credit on Service Bills for Manufacturing: Direct/Indirect Relation to Taxable Goods Matters A participant inquired about the eligibility to claim service tax credit on telephone and other service bills for manufacturing pharmaceutical machinery. An expert advised that CENVAT credit on input services is possible if these services relate directly or indirectly to manufacturing taxable goods, post-registration. Another expert highlighted changes in the Finance Act, 2011, noting that credit on such inputs is not advisable unless they directly contribute to the final product. A third contributor clarified that service tax registration is not necessary for availing CENVAT credit, but it is required for service tax payment.