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CENVAT credit eligibility on KKC as a manufacturer (deemed Service provider i.e. Reverse change Machanism

Service Tax - Started By: - Yatin Bhopi - Dated:- 11-3-2016 Last Replied Date:- 17-3-2016 - Dear experts, We are manufacturer and also liable to pay service tax under reverse charge mechanism on GTA, Works contract, Legal services etc. and also providing one service (receiving Intending commission from outside India) i.e. Business Auxiliary service. Now after 1st June 2016 Krishi Kalyan Cess will be applicable to all services. Below is the Para 3.1 of F. No. 334/8/2016-TRU dated 29.02.2016 Enabl .....

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ry is: Since we are paying service tax on reverse charge basis (deemed Service provider) and also in Business auxiliary service (as a service provider) can CENVAT credit is available to us? (received on various input services used in relation to manufacturing activity) - Reply By Rajagopalan Ranganathan - The Reply = Sir,You can avail the credit of Krishi Kalyan Cess paid by you under RCM and can utilise the same for payment of Krishi Kalyan Cess only on output service provided by you. - Reply B .....

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irst point is that whether you can avail the credit ST paid under reverse charge Mechanism is YES except, for the services that are under exclusion clause in the definition and the same can be used for payment of your service Tax liability.Second question related to KKC, as already stated , you can avail the cenvat credit and this particular amount taken as credit to be utilized only for payment of KKC and not for any other purpose.Hope your query is clarified.Best RegardsSuryanarayana - Reply B .....

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