Blogs

HIGH COURT

1. Credit of duty paid on installation of telecommunication towers is not eligible (Vodafone India Ltd. vs CCE, Mumbai-II 2015 (40) STR 422 (Bom)

• Background: Appellant engaged in business of providing telecom service availed credit on set up of telecommunication towers. Tribunal disallowed credit of duty paid on tower parts/ green shelter on the ground that these are ‘immovable property’, hence do not qualify as ‘capital goods’ or ‘inputs’. 
• Issue:...

There were indications during last few months that the government could come up with scheme to facilitate exporters for speedy disbursement of refund claim blocked since many years. The Government has chosen auspicious day of Diwali to shower ‘Dhan’ on the service providers in the form of announcing simplified scheme for liquidating accumulated credit . It is a welcome step by government complementing its initiative of ease of doing business in India, but the success of the same would...

Background:

Under the negative list based taxation, service tax is leviable on all services, other than those covered in negative list or a subject matter of exemption. There is no blanket exemption to the services which are provided in port. In this backdrop we examine what is port service and what are the service tax implications of port services under negative list based taxation

What is meant by term ‘port’?

Section 65B (38) sets out "port" has the meaning assigned to it in...

This festive season, service sector has witnessed imposition of Swachh Bharat Cess (SBC) in very hasty move by government. It was promised at the time of the budget that it would only be imposed on some services. Govt has gone back on its word. Further they have been left with very little time to prepare for this new tax. This owed to lack of clarity over various issues, holiday period and limited time between issuance of notification for levy and actual levy. Trade and industry had insisted...

In the next recent times we have seen margins getting squeezed and competitiveness increasing. Indirect tax constitutes around 25-30% of the top line in the manufacturing industries and 10-15% in Services. Indirect Tax laws are unfortunately different in their applicability and there are a number of restrictions on the credits in respect of capital goods, inputs and input services. Tax laws in India are ever changing and quite complicated. The tax administrators as well as the Internal...

Introduction:

The Cenvat credit scheme is beneficial scheme the intention of which is to allow the manufacturer of dutiable

goods as well as the provider of taxable services to avail eligible credit. In this article the paper writer examines the eligibility to credit on inputs to a manufacturer of final products.

CENVAT credit rules have unified the credit available on goods and services. With effect from 10.09.2004 the scope had been enlarged by amending the CENVAT credit rules...

Introduction:

Cenvat credit rules 2004 has merged  the credit of service tax paid on input services and of excise duty on inputs and capital goods. consequently the same set of rules applies to both a manufacturer and also to a service provider. However the credit availability to manufacturer is substantially more than that available to the service providers. 

A manufacturer could avail credit of service tax paid on eligible input services and a service provider could also avail...

SUPREME COURT

1. Both inputs and final products are entitled for rebate under Rule 18 of Central Excise Rules (M/s Spentex Industries Ltd 2015-TIOL-239-SC-CX)

• Background: Assessee filed claim of rebate on finished goods as well as material used in manufacture of final products. Department denied rebate claim stating that only one of the claim is admissible as Rule 18 of Central Excise Rules uses the word “OR” between two type of rebates.  
• Issue: Whether rebate claim can be...

Having discussed on the disclosure of availment and utilization of credit in previous two articles, we shall move on to examining applicability of Rule 6 of Cenvat Credit Rules to a service provider and its disclosure in the Return.   

In any value added tax system, credit of tax paid at input stage is eligible for adjustment against output liability. Cenvat credit rules have also been formulated based on the same principles (though have been made very complicated). One can...

In the previous article, we had discussed regarding availment of credit while filing of ST3 Return. It has been very encouraging to receive large number of queries on various aspects related to service tax return filing. To continue the series, in this article we have discussed disclosure of reversal/utilisation of credit.  

Once eligible credit has been availed, it becomes part of a pool out of which credit can be utilised to pay output liability. There is no correlation required...