TaxTMI 
TaxTMI 
We are into a propper retail chain business and paying huge service tax on rent.With the normal trading activity we are also providing business aux. services and other sho in shop rent. Are we eligible to claim service tax credit and if yes what is the general norms followed in this regard.
Cenvat credit in trading business
19 Nov 2012 
2 Replies 
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Cenvat credit eligibility for mixed taxable and exempt services: segregation, proportionate reversal, or payment option apply.
Cenvat credit for businesses supplying both taxable and exempted services is governed by Rule 6, which allows (i) segregation of accounts to claim credit only for taxable-service inputs, (ii) monthly payment of a fixed percentage of the value of exempted services, or (iii) monthly proportionate reversal under the prescribed formula; the chosen mechanism must be communicated in writing to authorities and remains binding for the financial year. (AI Summary)
Cenvat credit for businesses supplying both taxable and exempted services is governed by Rule 6, which allows (i) segregation of accounts to claim credit only for taxable-service inputs, (ii) monthly payment of a fixed percentage of the value of exempted services, or (iii) monthly proportionate reversal under the prescribed formula; the chosen mechanism must be communicated in writing to authorities and remains binding for the financial year. (AI Summary)