Credit of excise to be set off with service

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..... Credit of excise to be set off with service
Query (Issue) Started By: - Anil Jangid Dated:- 17-1-2016 Last Reply Date:- 20-1-2016 Central Excise
Got 7 Replies
Central Excise
my client having dealership of vehicles (car). they has service tax liability in servicing work of cars. can he take credit of excise duty on spare part purchase ???? today they are not registered with excise Re .....

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..... ply By Ganeshan Kalyani: The Reply: No he cannot avail. Reply By Rajagopalan Ranganathan: The Reply: Sir, As per Section 65B of Finance Act, 1994 "works contract" means a contract wherein transfer of property in goods involved in the execution of such contract is leviable to tax as sale of goods and such contract is for the purpose of carrying out construction, erection, commissionin .....

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..... g, installation, completion, fitting out, repair, maintenance, renovation, alteration of any moveable or immovable property or for carrying out any other similar activity or a part thereof in relation to such property. If you invoice the spare parts separately and pay sales tax/vat on the same then you cannot take the credit of excise duty paid on such spare parts since such activity will amount .....

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..... to trading and trading is excluded from service. Your service of cars will fall under maintenance service and you have to pay service tax on the gross amount charged by you for providing the service. Reply By KASTURI SETHI: The Reply: I endorse views of both experts. Reply By MARIAPPAN GOVINDARAJAN: The Reply: Thanks Rajagopalan Sir for your vivid explanation. Reply By Ganeshan Kalyani: The R .....

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..... eply: Nicely explained. hope the queriest has got his query solved otherwise he may post his further query. Reply By Mahir S: The Reply: Anil ji, Such credit of excise duty on spare parts purchased cannot be availed and used by you for service tax liability, as explained above. Regarding service tax payment, you have to collect service tax only for the Services and Labour/Repair charges provide .....

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..... d during the Servicing of Cars. No service tax is chargeable on the spare parts used/fitted during such service/repairs. Reply By KASTURI SETHI: The Reply: I agree with detailed reply of Sh.Mahir S. Sir.
Discussion Forum - Knowledge Sharing .....

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