Cenvat Credit in respect of Repair and Maintenance, Service Tax

[puneet]

A is engaged in trading of Airconditioners & also into the business of repair & maintenence contracts of Airconditioners undertaking AMC's. Further A is taking input tax cerdit @100% in respect of input service in relation to Repair & Maintenence /Security and on telephone/courier/photocopy/medical insurance of employees paid by employer taking cenvat credit retricted to 20% of service tax payable.Kindly explain whether claiming correct.

Posts / Replies

[Surender Gupta]

Yes, Maintenance or Repair / Security and other Services in terms of rule 6(5) are eligible for 100% cenvat credit. Rest of the services, Cenvat Credit is restricted to 20% of service tax payable.