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TMI BlogCenvat Credit bank charges on Export RealizationX X X X Extracts X X X X X X X X Extracts X X X X ..... Cenvat Credit bank charges on Export Realization X X X X Extracts X X X X X X X X Extracts X X X X ..... nvat credit is allowable any bank charges which has connected to your business activity. Reply By Rajagopalan Ranganathan: The Reply: Dear Shri. Rustagi, Rule 2 (l) of CENVAT Credit Rules, 2004 defines "input services" which states that- (l) "input service" means any service, - (i) used by a provider of output service for providing an output service; or (ii) used by a manufacturer, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whether directly or indirectly, in or in relation to the manufacture of final products and clearance of final products up to the place of removal, and includes services used in relation to modernisation, renovation or repairs of a factory, premises of provider of output service or an office relating to such factory or premises, advertisement or sales promotion, market research, storage up to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... place of removal, procurement of inputs, accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating, share registry, security, business exhibition, legal services, inward transportation of inputs or capital goods and outward transportation up to the place of removal; In my opinion charges paid by you to the Bank on export realizati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on and conversion of foreign currencies in INR are certainly attributable to you Business activity/promotion. Therefore service tax paid by you on such charges is eligible for credit. However, on the safer side it is better to get it clarified by the Department through Regional Advisory Committee. Reply By Pradeep Khatri: The Reply: Dear Ashwani, These services are attributable to post export a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctivities and are not input services. Either you would have to take refund under notification no. 41/2012-ST/29-06-2012 mentioning it on S/B or get it actual through submitting the prescribed documents in this notification. Regards, Neelam Taneja, (Executive Consultant) YAGAY and SUN (Management, Business and Indirect Tax Consultants) Reply By Pradeep Khatri: The Reply: Dear Ashwani, Long ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ck, the phrase "Business Activities" had been deleted from the definition of Input Services. Hence, Credit would not be allowable. Further, in export case, place of removal is port. But these activities are beyond the place of removal. Hence, on this very aspect the availment of CENVAT credit is doubtful. Regards, Neelam Taneja, (Executive Consultant) YAGAY and SUN (Management, Busine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss and Indirect Tax Consultants) Reply By PAWAN KUMAR: The Reply: Dear Sir, Cenvat credit is eligible on bank charges as per the rule 2(l) of Cenvat Credit Rules, 2004. Reply By Ashwani Rustagi: The Reply: Thanks to all for advice. I agree with Mr. Rajagopalan as per Rule 2 (l) of CENVAT Credit Rules, 2004 defines "input services" provides some inclusive services used in relation t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o modernization, renovation or repairs of a factory, premises of provider of output service or an office relating to such factory or premises, advertisement or sales promotion, market research, storage up to the place of removal, procurement of inputs, accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating, share registry, securi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty, business exhibition, legal services, inward transportation of inputs or capital goods and outward transportation up to the place of removal though these are not directly or indirectly used in relation to the manufacture of final products. Viewers further comments solicited. Regards, Ashwani Rustagi Reply By Naveed S: The Reply: Sir, Rule 2(l)(ii) of Cenvat Credit Rules, 2004, defines the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eligible category of Services for availing credit, according to which services should have been used directly or indirectly in the manufacture or clearance of their final products. Thus, it is apparent that there should be a nexus between the 'input service' and the activity of 'manufacture'. In the instant case, there is no nexus between the Foreign Bank's activities and the manufacturing activit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies. Further, it is obvious that these services were utilized after removal of the goods from the factory. Thus, these services have not been used by the assessee, directly or indirectly, in or in relation to the manufacture of final products or clearance of final products from/upto the place of removal. In view of above, input service credit does not appear to be admissible in above case. Repl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y By taral badani: The Reply: Dear sir, I have read all the comments and agree that the credit can be availed on export realization charged by the bank. The credit can be availed on the bank advice wherein all the details of TAX & Service Receiver is mentioned. The issue arising is that the address mentioned on the bank advice is of HO and not of the manufacturing unit. the manufacturing unit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is holding a separate central excise & ST registration on the address of factory premises.
Now in the above case is it possible for the unit to avail & utilize the credit where the address of HO is mentioned instead of manufacturing unit.
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