Cenvat credit on input services

[sunil mehta]

1)whether a trader in computer hardware and also providing computer repairs services can avail cenvat credit on input services (other than mentioned in rule 6(5)i.e.100% items)w.e.f.1/4/08 ? In other words whether trading turnover will be considered in 'exempted' services turnover? OR he will have to pay 8% on trading turnover value? OR he will have to follow prescribed formulae for availing cenvat credit on input services? 2)Similarly whether income on interest on advances recd.by a co-op. bank will constitute 'turnover' for new rule 6 (3)provisions?whether it is to be clubbed under 'exempted'services turnover ?

AI Summary

Debate on CENVAT Credit Eligibility for Computer Hardware Traders: Is Trading Turnover Exempt Under Rule 6? A discussion on a forum addresses whether a computer hardware trader and repair service provider can claim CENVAT credit on input services, considering trading turnover as exempted services turnover. D Gupta suggests that trading turnover is treated as exempted for rule 6 purposes, while V. Ramanujam argues that trading is a sale activity, not a service, and should not be included in exempted services. Ramanujam also contends that interest on advances should not be part of exempted services, as it is excluded from tax. Surender Gupta supports D Gupta's view, emphasizing the limitations of CENVAT credit on non-taxable services.