TaxTMI 
TaxTMI 
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 ?
Cenvat credit on input services
03 Jun 2008 
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Cenvat credit on input services: trading turnover and interest income may be treated as exempted services, limiting credit availability.
A dispute exists whether trading turnover and interest on advances constitute exempted services for apportioning Cenvat credit. One position treats trading and interest receipts as part of exempted-service turnover affecting the allocation formula and preserves 100% credit for specified commonly used input services; an alternative position excludes sale/trading proceeds and interest from the exempted-service base, limiting credit availability to the extent rules permit. (AI Summary)
A dispute exists whether trading turnover and interest on advances constitute exempted services for apportioning Cenvat credit. One position treats trading and interest receipts as part of exempted-service turnover affecting the allocation formula and preserves 100% credit for specified commonly used input services; an alternative position excludes sale/trading proceeds and interest from the exempted-service base, limiting credit availability to the extent rules permit. (AI Summary)