Is Co-relationship required between input service & output service for cenvat purpose ?

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..... Is Co-relationship required between input service & output service for cenvat purpose ?
Query (Issue) Started By: - sumeet tholle Dated:- 4-4-2015 Last Reply Date:- 12-4-2015 Service Tax
Got 4 Replies
Service Tax
Dear Sir, One of the my client is having hardware trading business and paid service tax on telephone, CA, GTA Bank charges etc service. Along with this, he has rented one s .....

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..... hop having rent ₹ 1lakh pm and collecting and paying Service Tax. Can he utilize Service Tax paid for CA, Telephone,GTA related with hardware business towards liability of renting services ? Pl. Guide with details. Thanks. Sumeet Tholle CA Reply By YAGAY AND SUN: The Reply: Dear Sumeet, Since Trading is exempted service therefore your client would not be able to avail CENVAT credit o .....

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..... n Service Tax paid on CA Fees, Telephone, GTA Services related with Harware business towards liability of renting services. Regards, YAGAY and SUN (Management, Business and Indirect Tax Consultants) Reply By Rajagopalan Ranganathan: The Reply: Sir, According to rule 2 (l) of CENVAT Credit Rules, 2004- "input service" means any service, - (i) used by a provider of output service for providi .....

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..... ng an output service; or (ii) used by a manufacturer, 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. Trading is nit an output service. Therefore if any of the input service is related to Trading then you are not eligible to avail the credit in respect of input service. As far as renting of immovab .....

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..... le property service is concerned you have to establish the relation between the input service and output service. Then only you are eligible to avail the credit of service tax paid on input services. Reply By MARIAPPAN GOVINDARAJAN: The Reply: Your client cannot take and utilize CENVAT credit. Reply By Himanshu Naik: The Reply: What if the business has 60 to 70 % revenue from services
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