Credit availability for service tax and vat

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..... Credit availability for service tax and vat
Query (Issue) Started By: - Narasimha Subramanian Dated:- 3-3-2009 Last Reply Date:- 16-3-2009 Service Tax
Got 2 Replies
Service Tax
We are a trading and manufacturing company with SSI status for our manufacturing activity. We are also coming under Excise for our manufacturing. We have started implementing MS Navision ERP in our company and .....

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..... we found that the invoice from the supplier of this product has VAT charged on the licenses sold to us and Service Tax on the Software development charges or customization charges. Can credit be taken on the VAT and Service Tax charged as we are registered under Excise for our manufacturing? If Credit can be taken, is there any guideline available for apportioning the credit between manufacturing .....

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..... and trading activity? Please clarify. Reply By Surender Gupta: The Reply: Since the ERP is for the purpose of your business, you may avail the benefit of cenvat credit of service tax paid to discharge excise duty. However, in case of trading activity since the activity is not subject to any duty of excise or service tax, you may take the proportionate credit as calculated on some reasonable basi .....

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..... s to fulfill the requirements of rule 3 and rule 4 of the cenvat credit and to comply with the requirement of rule 6(3) / (3A) of the Cenvat Credit rules. Reply By Rama Krishana: The Reply: Availing full credit may land you in trouble. Therefore, you may take the cenvat credit proportionate to your trading activity and manufacturing activity.
Discussion Forum - Knowledge Sharing .....

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