Rule 2(l): Input service (w.e.f. 1-4-2011), “Input service” means any service,

(i) used by a provider of output service for providing an output service; or


(ii) used by the manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and clearance of final products, upto the place of removal,


Examples of Services which are Included for Manufacturer

(a) Services used in relation to modernization, renovation or repairs of a factory, premises of provider of output service or an office relating to such factory or premises,

(b) Advertisement or sales promotion,

(c) Market Research,

(d) Storage upto the place of removal,

(e) Procurement of Inputs,

(f) Accounting,

(g) Auditing,

(h) Financing,

(i) Recruitment and Quality Control,

(j) Coaching and Training,

(k) Computer Networking,

(l) Credit Rating,

(m) Share Registry,

(n) Security,

(o) Business Exhibition,

(p) Legal Services,

(q) Inward Transportation of Inputs or Capital Goods and

(r) Outward Transportation upto the Place of Removal





1. Works Contract and Construction Services used for

    Constructing structure of building


 Laying of foundation or making of structures for support of Capital Goods

 However, a work contract service provider can claim Input of the same.


2. Renting of a Motor Cycle

in so far as they relate to a motor vehicle which is not a capital goods;


3.Service of General Insurance business, Servicing, Repair and Maintenance, in so far as they relate to  a motor vehicle which is not a Capital Goods,


    Input available when used by

  • Motor Car Manufacturer, can claim CENVAT of Input Service on servicing, repair and maintenance of a motor vehicle
  • an Insurance company can claim Input Service in respect of reinsurance of motor vehicle insured or reinsured by a such person;


4. Services related to personal consumption or use by employees

 like Outdoor Catering, Beauty Treatment, Health Services, Cosmetic and Plastic Surgery, Membership of a Club, Health and Fitness centre, Life Insurance,

 Health Insurance and Travel benefits extended to employees on vacation such as Leave or Home Travel Concession

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CA Maninder Singh

CA Maninder Singh is a Chartered Accountant for the past 13 years. He also provides Accounts Tax GST Training in Delhi, Kerala and online.