Cenavt credit - guest house

[Asked by Guest]

We are a Ltd Co. having trn over of 200 Crore engaged in maufacturing of non organic chemicals. We are located in a remote area where hotels of desired standards are not available, hence we have to maintain our own guest house for our business partners, like supplier, engineere contractors and also for asseising authorities during ther audits. I need clearance whether The service tax paid on guest house is cenvatable ??

[sudhir V S]

Dear Mr. Garg, Is your question is whether service used in guest house is cenvatable? if so the definition of the input service under Rule 2(l) of CCR 2004 is given in the two limbs I. any service used in or in relation to manufacture of final product. II. Activities related to business and gives a illustrative list. Hence in your case the service received can be considered as activity relating to business and therefore should be allowed as credit.

AI Summary

Input service credit for guest house services: business-use guest accommodation qualifies for cenvat credit when linked to company operations.
Guest house services provided by a manufacturer to host business partners and assessing officers qualify as input service under the two-limbed definition-services used in or in relation to manufacture or activities relating to business-and therefore may be availed as cenvat credit, subject to standard documentary and procedural compliance and no specific statutory exclusion.