Cenvat credit of service tax paid on rent of premises

[krishna rao radha sri]

Whether servie tax paid on rent of premises can be claimed as input service credit under the CENVAT Rules by the provider of a taxable service

Rent of premises can very well be claimed as input tax credit provided such premises is utilised in providing a taxable output service. Further, as per Rule 6 of CENVAT Credit Rules, a service provider can utilise 100% credit or 20% of output liability as the case may be, depending upon its maintenance of separate records showing utilisation of input services towards taxable/non-taxable output services.

AI Summary

Cenvat credit on rent of premises allowed where used for taxable services; utilisation limits depend on records.
Cenvat credit for service tax on rent of premises is claimable where the premises are utilised to provide a taxable output service. The provider must maintain separate records showing utilisation of input services towards taxable versus non taxable outputs; credit may then be applied against output service tax liability subject to the prescribed apportionment and utilisation limits.