cenvat credit availability

[Dalia Felix]

dear experts,

our company receives the service of contract carriage bus owners for taking our employees to the factory and pays ST under reverse charge mechanism. can we take the cenvat credit of the service tax paid ? Will the exclusion part of the 'input service definition as given under '...such as those provided in relation to outdoor catering, beauty treatment, health services, cosmetic and plastic surgery, membership of a club, health and fitness centre, life insurance, health insurance and travel benefits extended to employees on vacation such as Leave or Home Travel Concession, when such services are used primarily for personal use or consumption of any employee;” will hinder us from claiming the credit?

will you agree with me if i say, what has been denied is leave travel benefits provided to the employee and daily travel from the premises to the factory is in relation to manufacture and hence credit is available? 

thanks and regards.

[YAGAY andSUN]

Due to amendments in the definition of INPUT SERVICES, You cannot avail the CENVAT credit on such taxable services.

[Guest]

Yes ,

u r allowed to take credit of service tax paid under reverse mechanism.

[JAMES PG]

You are agreeing that you are discharging Service Tax under reverse charge for the services obtained for employee pick up and dropping. Such reverse charge payment is made " in respect of the services provided or agreed to be provided by way of renting of motor vehicle designed to carry passengers".  ( Ref Sl No 7 of Not 30/12 dated 20th June,12). Now please refer to the exclusion clauses in Rule 2 (l) B of  the Input service definition in Cenvat Credit Rules which clearly mentioned "services provided by way of renting of motor vehicles"

In view of the above, you are not at all eligible to avail Cenvat credit of the reverse charge payment made in this regard

AI Summary

Company Questions CENVAT Credit Eligibility for Employee Transport Services; Differing Expert Opinions on Input Service Definition A company inquired about the eligibility to claim CENVAT credit on service tax paid under the reverse charge mechanism for contract carriage services used to transport employees to the factory. The query focused on whether such services fall under the exclusion part of the input service definition, which restricts credit for services used primarily for personal employee use. Responses varied: one expert stated amendments to the input services definition prevent claiming credit, another affirmed credit eligibility, and a third clarified that services related to renting motor vehicles are explicitly excluded, thus disallowing the credit claim.