Dear Sir,
I am working as Finance Controller for a Hotel in Lucknow. We are going in for renovation of the existing Hotel. There are few capital goods to be purchased in the coming couple of months time. Can you please advise us as to how can we utilise the cenvat credit of the excise duty paid on capital goods against our service tax liability. My confusion starts for the notification no.26/2012 dated 20-06-2012 wherein it states in point no 4 &6 as under:
|
Sl.
No.
|
Description
of taxable
service
|
Percent-
age
|
Conditions
|
|
4
|
Bundled service by way of
supply of food or any other article of human consumption or any drink, in a
premises ( including hotel, convention center,
club, pandal,shamiana or any other place, specially arranged for
organizing a function) together with renting of such premises
|
70
|
(i) CENVAT credit on any
goods classifiable under Chapters 1 to 22 of the Central Excise Tariff Act,
1985 (5 of 1986) used for providing the taxable service, has not been taken
under the provisions of the CENVAT Credit Rules, 2004.
|
|
5
|
Transport of passengers
by air, with or without accompanied belongings
|
40
|
CENVAT credit on inputs
and capital goods, used for providing the taxable service, has not been taken
under the provisions of the CENVAT Credit Rules, 2004.
|
|
6
|
Renting of hotels, inns,
guest houses, clubs, campsites or other commercial places meant for
residential or lodging purposes.
|
60
|
Same as
above.
|
1. In point no 4 relates to restaurant servcs, pandal shamina and food joints. There is a mention of of the " cenvat credit being utilised for providing the taxable services, which has not been taken under the provisions of the CENVAT Credit Rules, 2004". It states about the only cenvat credit utilised for providing taxable service but no where it mentions about the cenvat credit on capital goods. Does that mean that capital goods cenvat credit is not available for this section in the notification.
2. In point no 6 it does not states about chapter 1 to 22 but but states " CENVAT credit on inputs and capital goods, used for providing the taxable service, has not been taken under the provisions of the CENVAT Credit Rules, 2004". Here it states about the cenvat credit utilised for providing taxable service as wellas capital goods. Does that mean that capital goods cenvat credit is available for this section as per the notification.
3. In any case if it is allowed then how much can be utilised during the year.
Need your expert advise.
Saurav Chopra.
