Furnishing Documents for availment of Credit of excise duty

[Guest]

service provider is authorised dealer of two wheeler company for sale and service of two wheelers.whether excise duty paid on purchase of two wheelers and spare parts is allowed as deduction out of service tax payable on service charges,what documents are to be furnished to the department for availing credit of excise duty,kindly clarify,I shall be grateful.

[Surender Gupta]

This query has two comonents of credit one for excise duty paid on two wheelers and second is excise duty paid on spare parts. Authorised dealer while providing services would utilise the spare parts only therefore, he is eligible to avail the credit of excise duty paid on Spare Parts only. Excise duty paid on two wheelers is not available as credit as these goods are sold as it is and has no contribution in providing output service. Further, you must have valid duty paying documents for this purpose.

AI Summary

Excise duty credit on inputs: credit allowed for spare parts used in providing services, not for sale of vehicles. Authorised dealers may claim credit only for excise duty on inputs consumed in providing the taxable service: excise duty on spare parts used in servicing is eligible for credit if supported by valid duty payment documents, whereas excise duty on complete two wheelers purchased for resale is not eligible because finished goods sold as such do not contribute to the service output.