9911796707
TMI BlogReversal of Cenvat credit under rule 6(3A) of Cenvat credit rules 2004 : 2/3X X X X Extracts X X X X X X X X Extracts X X X X ..... Reversal of Cenvat credit under rule 6(3A) of Cenvat credit rules 2004 : 2/3 X X X X Extracts X X X X X X X X Extracts X X X X ..... of 60% * Exempt Service - Interest from bank 'B' receives interest from bank on fixed deposits 'B' avails CENVAT credit on common services used for providing abovementioned taxable and exempt services. Hence, 'B' needs to reverse proportionate CENVAT credit attributable to provision of exempt services under rule 6(3A) of CENVAT credit rules 2004. Option 1 Option 2 Particulars Description o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Service Revenue as per P&L a/c (Rs) Revenue on which Service tax is paid (Rs) Remarks Taxable Service Restaurant service 1,00,000 40,000 Service tax is paid on 40% as per provisions of Notification 24/2012 Exempt Service Interest on fixed deposit 10,000 10,000 Covered under Negative list as per section 66D of Finance Act 1994 CENVAT Credit availed on Common services ₹ 25,0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 00 Formula for reversal of CENVAT credit on Common services Exempt Services provided ------------------------------------ X [ Cenvat Credit availed on Common (Exempt services provided + Services ] Taxable services provided) Cenvat credit to be reversed 10,000 ----------- X 25,000 [10,000 + 1,00,000] = ₹ 2,273 10,000 ----------- X 25,000 [10,000 + 40,000] = ₹ 5,000 Accord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing to section 65B(51), "taxable service" means any service on which service tax is leviable under section 66B Which option is correct and why ? Reply By Sonali Sharma: The Reply: Your very idea is based upon the concept of common input services. By my experience I am almost sure that there is no common input service between restaurant services and interest received on fixed deposits ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in practical world.To be clearer, I feel that there is no input service for interest received on deposits. (In fact receiving interest misses the element of services though mentioned in Negative list as a clarification sort of.) So when no common service is there rather there is no input service for interest receipts, there is no need to apportion the input services credit which is purely attribu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... table to restaurant service. X X X X Extracts X X X X X X X X Extracts X X X X
|
