These abatements lead to less rate of tax

 

Hence, sometimes Central Government places a condition that if abatement is being claimed by Service provider, he cannot claim Cenvat

 We know that there are 3 types of Cenvat

  1. Cenvat on Inputs
  2. Cenvat on Capital Goods
  3. Cenvat on Input Services

 

CONDITIONS IMPOSED FOR DIFFERENT SERVICES

 

Air Transport Service and Renting on Hotels

Cenvat on Inputs and Capital Goods is not available

(But Cenvat on Input Service is available)

 

Goods Transport Agency

There is reverse charge on Goods Transport Agency (Freight charges) in some cases

Hence, the service receiver pays Service Tax

However, condition for not claiming cenvat is on Service provider and not on service receiver

Service Provider cannot claim cenvat of all 3 (inputs/capital goods/input services)

 

 

Cab Transport

Service Provider cannot claim cenvat of all 3 (inputs/capital goods/input services)

However,it may happen that he has availed input service of some other cab operators (hired cabs of some other cab operators) 

In this case, Cenvat of Input Service is available as follows

If such other Cab Operator has charged

Full Service Tax-40% Input is available

40% Service tax (i.,e.claimed 60% Abatement)-Full Input Available

 

 

Tour Operator

Service Provider cannot claim cenvat of all 3 (inputs/capital goods/input services)

However,it  may happen that he has availed service of some other tour operator

Input of service of such other tour operator is available

 

Also abatement is only applicable if gross amount charged in Bill and commission not shown separately

 

Type of Service Amount in Bill
Package Tour Bill shall indicate gross amount of whole package
(Service tax rate is Charged on Whole Package)
Booking Charges Bill shall indicate gross amount of total charges
(If Hotel charges and Commission shown separately, then Service tax at full rate on Booking Charges)
Other Cases Bill shall indicate gross amount charged (Commission not shown separately)

 

Bundled Service Supply of Food/Drinks with Rent

(like Hotel/Banquet hall/Pandal)

No Cenvat of Goods covered in Chapters 1 to 22 of the Central Excise Tariff Act, 1985 (called CETA)

 (No Input of Food items purchased in restaurant)

 

Construction of Complex,building ,structure

No Cenvat on Inputs

The value of land is included in the amount charged from the service receiver.

 

Other Services

No Cenvat of Inputs,Capital Goods and Input Services on

  • Rail Transport both goods and passengers (New Amendment)
  • Radio Taxi/Goods Carriage except Cab

 

 

 

 

 

  1. Service Tax
  2. Exemptions and Abatement
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CA Maninder Singh's photo - Expert in Practical Accounts, Taxation and Efiling
CA Maninder Singh
CA Maninder Singh is a Chartered Accountant for the past 6 years. He provides courses for Practical Accounts, Taxation and Efiling at teachoo.com .
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