Service tax credit on Input Services, Service Tax

[Ashok Jain]

Sir, 2% of our total receipts attract service tax and balance 98% sales are covered under VAT/CST and on this 98% sales no service tax is payable.Can we take full credit of service tax paid on input services like telephones,CA services, security services etc. for this 2% reciepts.

Thanks and Regds

Posts / Replies

[harsh]

It is immaterial to proportionate the Service tax paid by you on the 2% percent of your total recepits,full credit of service tax on input services can be taken on your total service tax received.

[A RAVINDRA]

Mr. Harsh is wrong. If you are paying CENVAT then only you can avail 100% input credit. Other wise you have to take proportionaltly. Generally it is 20% of the service tax paid by you on your input services. But if any input service availed by you is exclusively for discharging out put service(to be established propery) then you can avail 100% credit on such exclusive input services.