Utilisation of Input tax credit

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The input service tax credit can be utilised only to the extent of 20% of output service tax if both exempted and taxable services are provided with credit taken inputs. what happens to balance input tax credit (80%. whether it can be used for other services 100% or not. Please give me how it can be utilised in further periods.

AI Summary

Input Tax Credit Use Limited to 20% for Mixed Services; Balance Carried Forward, No Refunds Allowed. A query was raised regarding the utilization of input tax credit when both exempted and taxable services are provided. The input service tax credit can be used up to 20% of the output service tax, raising concerns about the remaining 80%. Responses clarified that the balance credit does not lapse and can be carried forward for future adjustments. If inputs are solely for taxable services, 100% credit is available. For common inputs, 20% can be utilized, with the remainder carried forward. Refunds for the unused balance are not permitted, and it is advisable to maintain separate credit accounts.