Cenvat credit

KALAIKOVAN (Querist) 13 August 2011 This query is : Resolved
Sir,

A trader (Watches and accessories) provide a taxable service (Business Auxillury Service).

Can they take CENVAT Credit on Rent payment for Showroom?

Trading Turnover is apx 90%
Taxable Serice is apx 10%

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R.Ramachandran (Expert) 13 August 2011
The CenVAT Credit if at all is only on the "service tax" paid, and not on the entire RENT amount.

Further, in your case, since your main activity is trading, and the dominant intention of your renting the premises is for that purpose, the availability of cenvat credit of the proportionate service tax paid on the proportionate rent would be very doubtful and it is not worth taking the trouble.

Raj Kumar Makkad (Expert) 14 August 2011
I do agree with Ramachandran.

soumitra basu (Expert) 18 August 2011
If you can prove the rent was payble only for earning income which is chargeable under Business Auxiliary Service, then it is available. Otherwise, either proportionate or nil.

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