CENVAT Credit on Legal Expenses

[Pradeep Jain]

Dear Sir,

 

We have been paying Service Tax on following Legal Expeses under reverse charge the system:-

1- Reply to Show Cause Notice of Excise, Customs, Service Tax and Sales Tax ,Income Tax and Labour Law;

2- To attend personal hearing before appropriate authority of Excise, Customs, Service Tax , Sales Tax and Income Tax and CESTAT,  High Cort and Labour Court etc.

3- Opinion relating to on above subject.

 

My query is that :-

 

Are we entitled to avail CENVAT Credit on the Legal Services ?

 

Regards

 

Pradeep Jain

[YAGAY and SUN]

Legal services, has been very well incorporated in the definition of the Input Service.  CENVAT credit on Legal services will be available to you.

 

Please also go through the defintion of Input Services for better understanding.

[CASeetharaman KC]

Definition of Input service under Cenvat Credit Rules includes Legal Services as per details given below

input service” means any service, -

            (i) used by a provider of output service for providing an output service; or

            (ii) used by a manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and clearance of final products upto the place of removal,

            and includes services used in relation to modernisation, renovation or repairs of a factory, premises of provider of output service or an office relating to such factory or premises, advertisement or sales promotion, market research, storage upto the place of removal, procurement of inputs, accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating, share registry, security, business exhibition, legal services, inward transportation of inputs or capital goods and outward transportation upto the place of removal;

AI Summary

CENVAT credit on legal services recognised where such services qualify as input services used in manufacture or provision of output services.
Legal services, including fees for replies to show cause notices, attendance at hearings and legal opinions in relation to tax and labour matters, are expressly included within the definition of input service under the Cenvat Credit Rules and therefore qualify for CENVAT credit when used by a provider of output service or by a manufacturer in or in relation to manufacture and clearance of final products up to the place of removal.