Article 8

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Input Service - A New Jigsaw Puzzle w.e.f. 1-4-2011

1 Cenvat Credit is available on input goods, input services and capital goods. Manufacturer as well as service provider will be eligible to get Cenvat credit of input services. Definition of input service has been changed w.e.f. 1-4-2011. The new definition is significantly different from the earlier definition of input service. Rule 2(l) of Cenvat Credit Rules (as effective from 1-4-2011), defines input service as follows Input service means any service, (i) used by a provider of taxable service for providing an output service; or (ii) used by a 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, and includes services used in relation to modernisation, renovation or repairs of a factory, premises of provider of output service or an office relating to such factory or premises, advertisement or sales promotion, market research, storage upto the place of removal, procurement of inputs, accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating, share registry, security, business exhibition, legal services, inward transportation of inputs or capital goods and outward transportation upto the place of removal; but excludes services, (A) specified in sub-clauses (p), (zn), (zzl), (zzm), (zzq), (zzzh) and (zzzza) of clause (105) of section 65 of the Finance Act (hereinafter referred as specified services), in so far as they are used for- (a) construction of a building or a civil structure or a part thereof; or (b) laying of foundation or making of structures for support of capital goods, except for the provision of one or more of the specified services; or (B) specified in sub-clauses (d), (o), (zo) and (zzzzj) of clause (105) of section 65 of the Finance Act, in so far as they relate to a motor vehicle except when used for the provision of taxable services for which the credit on motor vehicle is available as capital goods; or (C) such as those provided in relation to 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, when such services are used primarily for personal use or consumption of any employee.

1-1 Analysis of the definition

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The definition of input service is broadly in three parts First is main part, second is inclusive part and third part covers exclusions. First part of the definition is restrictive in scope as it covers input services used for providing taxable output service or used by manufacturer, directly or indirectly, in relation to manufacture or clearance of final product upto the place of removal. Second i.e. inclusive part of the definition expands the scope much beyond the coverage of first part. The third part covers specific exclusions. 1-2 Meaning of includes
Definitions are inclusive or exhaustive. If the definition uses the word means it means that it is restrictive and exhaustive. However, if the word include/s is used in definition, it means that the definition is not exhaustive but it is inclusive, i.e. it expands the meaning - Doypack Systems (P.) Ltd. v. UOI (1988) 2 SCR 962 = (1988) 2 SCC 299 = 65 Comp Cas 1 = 36 ELT 201 = AIR 1988 SC 782 * Lucknow Development Authority v. M K Gupta (1994) 1 SCC 243 = 1994 AIR SCW 97 = AIR 1994 SC 787 = 80 Comp Cas 714 (SC) * Feroze N Dotivala v. P M Wadhwani 2002 AIR SCW 4904. In Corporation of City of Nagpur v. Its Employees AIR 1960 SC 675, it was held : The inclusive definition is a well recognised devise to enlarge the meaning of the word defined, and, therefore, the word defined must be construed as comprehending not only such things as it signifies according to its natural import but also those things the definition declares that it should include similar views in RD, ESIC v. Highland Coffee Works - (1991) 3 SCC 617 = AIR 1991 SC 129 = 1991 AIR SCW 2821 (3 member bench) * CIT v. Taj Mahal Hotel - (1971) 3 SCC 550 = AIR 1972 SC 168 = (1971) 82 ITR 44 (SC) * Municipal Corporation v. Indian Oil Corpn - AIR 1991 SC 686 = (1991) Supp 2 SCC 18 * S K Gupta v. K P Jain (1979) 3 SCC 54 * Narmada Bachao Andolan v. UOI AIR 2005 SC 2994 (SC 3 member bench) * CTO v. Rajasthan Taxchem Ltd. (2007) 3 SCC 124 = 5 VST 529 = 209 ELT 165 (SC) * Karnataka Bank Ltd. v. State of AP (2008) 12 VST 459 (SC) * K N Farms Industries v. State of Bihar AIR 2009 SC 3031. In Forest Range Officer v. P Mohammed Ali - AIR 1994 SC 120 = 1993 AIR SCW 3754 = 1993 (3) SCC (Supp) 627, it was observed : Includes is used as extension. An interpretation clause which extends the meaning of a word does not take away its ordinary meaning. An interpretation clause of inclusive definition is not meant to prevent the word receiving its ordinary, popular and natural sense wherever that would properly be applicable, but to enable the word as used in the Act to be applied to some things to which it would be normally not applicable - same view in Black Diamond Beverages v. CTO 1997 AIR SCW 3654 = (1997) 107 STC 219 (SC) = AIR 1997 SC 3550, where it was held that inclusive part of definition cannot prevent the main provision from receiving its natural meaning. When the word used is includes, such definition is to be given a wider meaning and not exhaustive or restricted to the items contained in the definition - Krishi Utpadan Mandi Samiti v. Shanker Industries - 1993 AIR SCW 762 = 1993 Supp (3) SCC 361(II) (SC) * Tamil Nadu Kalyana Mandapam Association v. UOI 2004 (167) ELT 3 = 4 STT 308 = 267 ITR 9 = 136 Taxman 596 = 135 STC 480 (SC) * Ponds India v. CTT (2008) 227 ELT 497 = 15 VST 256 (SC). IDecision in Maruti Suzuki restricting scope of includes doubted and issue referred to large bench - In Maruti Suzuki Ltd. v. CCE (2009) 9 SCC 193 = 22 STT 54 = 240 ELT 641 (SC),restricted meaning to word includes in definition of input under Cenvat Credit Rules was given and it was held that even in respect of second i.e. inclusive part of definition of input, relation with manufacture is required in appeal from Maruti Suzuki Ltd. v. CCE (2009) 238 ELT 180 (CESTAT). [This view has been doubted and the matter has been referred to a large bench in Ramala Sahkari Chini Mills v. CCE (2010) 29 STT 464 = 8 taxmann.com 122 = 260 ELT 321 (SC)] 1-3 Meaning of in relation to

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Scope of inclusive part of definition of input service is further widened by use of the term in relation to. The expression in relation to (so also pertaining to) is a very broad expression, which pre-supposes another subject matter. These are words of comprehension which might both have a direct significance as well as an indirect significance depending on the context. -. - Relating to is equivalent to or synonymous with as to concerning with and pertaining to. The expression pertaining to is an expression of expansion and not of contraction - Doypack Systems P Ltd. v. UOI (1988) 2 SCR 962 = 1988 2 SCC 299 = (1989) 65 Comp Cas 1 = 1988 (36) ELT 201 (SC) = AIR 1988 SC 782 * Tamil Nadu Kalyana Mandapam Association v. UOI 2004 (167) ELT 3 = 4 STT 308 = 267 ITR 9 = 136 Taxman 596 = 135 STC 480 (SC) CCE v. Solaris Chemtech (2007) 7 SCC 347 = 9 STT 412 = 214 ELT 481 (SC). 'In relation to' are words of comprehensiveness which might have both a direct significance or indirect significance depending on the context. They are not words of restrictive content. - State Waqf Board v. Abdul Azeer Sahib (1967) 1 MLJ 190 = AIR 1968 Mad 79 * State of Karnataka v. Azad Coach Builders (2010) 9 SCC 524 = 7 taxmann.com 28 = 4 GST 72 = 36 VST 1 = 262 ELT 32 (SC 5 member bench). The expression in relation to is of widest import. Thyssen Stahlunion GMBH v. Steel Authority of India 1999 AIR SCW 4016 = AIR 1999 SC 3923 = 1999 (6) SCC 334.

2 Place of removal
The concept of removal is borrowed from Central Excise and hence applies only to a manufacturer and not service provider. CBE&C vide circular No. 137/3/2006-CX.4 dated 2-2-2006 has confirmed that when the words place of removal are not defined in Finance Act, definition under Central Excise Act is to be considered. It has been clarified that in case of depot sale, depot is place of removal. Hence, service tax on freight upto depot will be eligible for Cenvat credit whether the duty is payable under section 4 (ad valorem) or section 4A (MRP basis). The term place of removal is not defined in Cenvat Credit Rules, but is defined in section 4(3)(c) of Central Excise Act as follows Place of removal means (i) a factory or any other place or premises of production or manufacture of the excisable goods; a warehouse or any other place or premises wherein the excisable goods have been permitted to be deposited without payment of duty; a depot, premises of a consignment agent or any other place or premises from where the excisable goods are to be sold after their clearance from the factory

(ii)

(iii)

from where such goods are removed. The words from where such goods are removed apply to all the three clauses. As per section 2(h) of Central Excise Act, sale and purchase with their grammatical variations and cognate expressions, means any transfer of possession of goods by one person to another in the ordinary course of trade or business for cash or deferred payment or other valuation consideration. 2-1 Place of where ownership gets transferred to buyer is place of removal when there is direct sale from factory

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Normally, factory gate is place of removal, except in case of depot sales. In Escorts JCB Ltd. v. CCE (2003) 1 SCC 281 = 53 RLT 1 = 146 ELT 31 (SC), the contract was for sale ex-factory. Goods were handed over to the carrier/transporter. However, insurance was arranged by assessee, though charged separately. It was contended by department that since insurance is arranged by seller, the property in goods passes to buyer only when goods reach the destination. Hence, buyers place will be the place of removal and hence insurance and freight will be includible in the price. This view was rejected by SC. It was held that as per section 39 of Sale of Goods Act, delivery of goods to carrier is prima facie delivery of goods to buyer. Ownership in the property may not have relevance in so far as insurance of goods sold during the transit is concerned. It is not necessary that insurance of the goods and ownership of goods must always go together. [Reversing decision of CEGAT in Escorts JCB Ltd. v. CCE 2000(118) ELT 650 = 35 RLT 9 (CEGAT)] However, if sale i.e. takes place when ownership in goods is transferred to buyer at destination, that will be the place of removal (except in case of depot sales). 2-2 Place of removal if ownership is transferred at destination In Escorts JCB Ltd. v. CCE 2000(118) ELT 650 = 35 RLT 9 (CEGAT), it was observed, in respect of provisions under old section 4, as follows - 'Place where excisable goods are sold can be place of removal. A place where goods are sold can be a place where the property in goods sold passes from buyer to seller. If goods are sold only when they reach the destination, that will be the place of removal. view confirmed in CCE v. Prabhat Zarda Factory Ltd. 2000(119) ELT 191 = 38 RLT 637 (CEGAT 5 member bench), where it was held that as per definition of 'sale' u/s 2(h) of CEA, transfer of possession of goods is the essence of sale. [In my opinion, though decision in case of Escorts JCB has been reversed by SC on different ground, the principle discussed above is still valid]. In Ambuja Cements v. UOI (2009) 236 ELT 431 (P&H HC DB), it has been held that if freight charges form part of assessable value, price is FOR destination, if ownership of goods remains with seller till delivery at customers doorstep, transit insurance is borne by assessee and property in goods is not transferred till delivery, outward transportation is input service and is eligible for Cenvat credit. (thus, the customers place will be place of removal).

2-3 Port is place of removal in case of exports

In case of exports, the place of removal is port where export documents are presented to customs office Kuntal Granites v. CCE (2007) 215 ELT 515 = 2007 TIOL 930 (CESTAT) quoted and followed in Rajasthan Spinning & Weaving Mills v. CCE (2007) 8 STR 575 (CESTAT). Port is the place of removal in exports as property gets transferred to buyer at port RSWM v. CCE (2008) 223 ELT 481 (CESTAT SMB) * CCE v. Adani Pharmachem (2009) 19 STT 239 = 238 ELT 179 (CESTAT SMB) * Modern Petrofils v. CCE (2010) 253 ELT 609 (CESTAT SMB) * Cauvery Stones v. CCE (2010) 24 STT 400 = 257 ELT 152 (CESTAT SMB). In CCE v. Rolex Rings (2008) 230 ELT 569 (CESTAT SMB), it has been held that in case of exports, port is the place of removal as exporter continues to be owner of goods till the same are exported. Hence, CHA and surveyor services which are relating to export business are eligible for Cenvat credit.

2-4 Meaning of Warehouse

If goods are sold from warehouse, that will be treated as place of removal in terms of section 4(3)(c)(ii). In such case, transport, handling and insurance charges upto warehouse incurred by assessee will be includible in the Assessable Value. The term warehouse has restricted meaning. It is confined only those warehouses which are

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notified under rule 20, where goods can be kept without payment of duty Roha Dyechem v. CCE 2005 (179) ELT 39 (CESTAT SMB).

3. Services specifically excluded from definition of input service

Some services have been specifically excluded from definition of input service. These would not be eligible even if these would be eligible as per inclusive part of the definition of input service. 3.1 Services specifically excluded under clause (A) Following services have been specifically excluded from definition of Input Services, if they are used for construction of a building or a civil structure or a part thereof, or laying of foundation or making of structures for support of capital goods The aforesaid services are termed as specified services for purpose of this sub-clause] * Architect Services [Section 65(105)(p)] * Port Services [Section 65(105)(zn)] * Other Port Services [Section 65(105)(zzl)] * Airport Services [Section 65(105)(zzm)] * Commercial or Industrial Construction [Section 65(105)(zzq)] * Construction of Residential Complex [Section 65(105)(zzzh)] * Works Contract Service [Section 65(105)(zzzza)] These specified services will be eligible for Cenvat credit only if used for any of these Specified Services. e.g. Architect Service will be eligible as input service if used for Port Service or Construction Service or Works Contract Service. Further, these services would not be eligible only if they are used for construction of a building or a civil structure or a part thereof, or laying of foundation or making of structures for support of capital goods. If these are used for other purposes, e.g. finishing services, repair, alteration or restoration, these should be eligible. Port or airport services provided to aircraft or renting would be eligible. 3.2 Services specifically excluded under clause (B) Following services are excluded from definition of input service only so far as they relate to a motor vehicle * General Insurance Services [Section 65(105)(d)] * Renting of a cab [Section 65(105)(o)] * Motor vehicle related service (earlier termed as Authorised Service Station service) [Section 65(105)(zo)] * Supply of tangible goods [Section 65(105)(zzzzj)] However, these services will be eligible as input services if used for provision of taxable services for which Cenvat credit of motor vehicle is available as capital goods. Thus, specified input services relating to motor vehicle are specifically excluded except in cases where motor vehicle is eligible for Cenvat Credit as capital goods (See definition of Capital

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Goods for Cenvat Credit). Meaning of motor vehicle The term motor vehicle is not defined in Cenvat Credit Rules. As per Central Excise Tariff Act, motor vehicles are covered under chapter 87 of Central Excise Tariff. As per section 65(73) of Finance Act, 1994; motor vehicle has same meaning as assigned to it under section 2(28) of Motor Vehicles Act. As per that Act, motor vehicle means any mechanically propelled vehicle adapted for use upon roads, whether the power or propulsion is transmitted thereto from internal or internal source and includes a chassis to which a body has not been attached and a trailer; but does not include a vehicle run on fixed rails or a vehicle of special type adapted for use only in a factory or in any other enclosed premises or a vehicle having less than four wheels fitted with engine capacity of not exceeding thirty five cubic centimeters. Some vehicles (e.g. fork lift truck, excavators) require registration under Motor Vehicles Act, but they fall under chapter 84 of Central Excise Tariff. Goods falling under chapter 84 are eligible for Cenvat credit. Hence, insurance, repair services, renting etc. in respect of such vehicles should be eligible for Cenvat credit.

3.3 Services specifically excluded under clause (C) Certain services 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 have been specifically excluded. However, this exclusion is only when such services are used primarily for personal use or consumption of any employee. This exclusion will not apply in other cases. For example, outdoor catering for sales promotion would be eligible. Club membership fee of a director (who is not employee) would be eligible. Corporate club membership (without naming any specific employee) should be eligible. The condition that these services must be used primarily for personal use or consumption of employees is essential. For example, say the company X organises Distributors conference in which service of outdoor catering is obtained. In the Distributors conference, there will be some employees of M/s X who will also take lunch or dinner along with the distributors. The services are not primarily meant for personal use. The services of outdoor catering are provided as incidental to Distributors conference. Therefore, the credit of service tax paid on such outdoor catering would be available as credit to M/s X.

4. What is wasteful expenditure as per the revised definition of input service

As per the revised definition of input service, following is the wasteful expenditure and do not deserve any Cenvat credit, as per departments view. * Factory and office building (We are a free society. Indians do every conceivable thing in open. Hence, department is of vies that production or provision of service or administration should be done in open) * Motor vehicle is a luxury even if used to transport employees or for business purposes [Sales and purchase people can either go by bus or by air since air travel can be allowable input service]

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* All employee benefits line transport, canteen facility, health care, insurance, welfare expenditure is a pure waste [Company should employ only casual labour at minimum wages with no benefits].

5. Eligibility of various services as input services

Based on aforesaid discussions, following is summary of various input services eligible and not eligible. Of course, litigation is inevitable in many cases.

Service Accounting Expenses Advertisement (may be for recruitment, tenders, sales promotion, legal notices etc. as no restriction) Air travel of employees

Comment about eligibility Eligible as specifically included in definition Eligible as specifically included in definition

Eligible if in relation to manufacture or provision of taxable goods/services, modernization or repairs of factory or office, storage, quality control, recruitment, accounts, audit, sales promotion, procurement of inputs, legal services, financing, computer networking
Not eligible if used for construction of a building or a civil structure or a part thereof, or laying of foundation or making of structures for support of capital goods. If the service is used for other purposes, e.g. for aircrafts, provided to importer/exporter or to CHA, it would be eligible.

Airport Service

The service is also eligible in case of construction or works contract services or port or airport services. Architect Services
Not eligible if used for construction of a building or a civil structure or a part thereof, or laying of foundation or making of

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structures for support of capital goods. If the service is used for other purposes, e.g. finishing services, repair, alteration or restoration, these should be eligible.

The service is also eligible in case of construction or works contract services or port or airport services. Auditing Service Authorised Service Station Eligible as specifically included in definition See under Motor vehicle Related services (as per new definition) Eligible under Financing Specifically excluded Hence not eligible Eligible as relating to sales promotion Eligible as specifically included in definition Eligible if in relation to manufacture or provision of taxable goods/services, modernization or repairs of factory or office, storage, quality control, recruitment, accounts, audit, sales promotion, procurement of inputs, legal services, financing, computer networking Not Eligible as specifically excluded Eligible for inputs and for final products upto place of removal (port is place of removal for export) Specifically excluded for employee Hence not eligible [Club membership fee of a

Banking and other financial services Beauty Treatment Brand Ambassadors

Business exhibition

Business Support Service

Canteen Expenses for employees Clearing & Forwarding Agent

Club Membership

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director (who is not employee) would be eligible. Similarly, corporate membership of a club (not in name of any particular employee) should be eligible]

Commercial Coaching and training Commission Agent

Eligible as specifically included in definition Eligible as relating to sales promotion or procurement of inputs Eligible as specifically included in definition

Computer networking

Consignment Agents expenses Eligible as consignment agents place is place of removal when sale is from depot Construction of a building or a civil structure or a part thereof
Not eligible if used for construction of a building or a civil structure or a part thereof, or laying of foundation or making of structures for support of capital goods. If the service is used for other purposes, e.g. finishing services, repair, alteration or restoration, these should be eligible.

The service is also eligible in case of construction or works contract services or port or airport services.

Construction of residential complex

Not eligible if used for construction of a building or a civil structure or a part thereof, or laying of foundation or making of structures for support of capital goods. If the service is used for other purposes, e.g. finishing services, repair, alteration or restoration, these should be eligible.

The service is also eligible in case of construction or works contract services or port or airport services. Consulting Engineering, management Eligible if in relation to manufacture or provision of

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taxable goods/services, modernization or repairs of factory or office, storage, quality control, recruitment, accounts, audit, sales promotion, procurement of inputs, legal services, financing, computer networking Courier Eligible if related to modernization or repairs of factory or office, accounts, financing, procurement of inputs, sales promotion, inward and outward transportation, share registry, recruitment, legal services Eligible as specifically included in definition Eligible for procurement of inputs and also for exports as port is place of removal for export Eligible as depot is place of removal when sale is from depot. In other cases, may be eligible as sale promotion Eligible since in relation to manufacture or provision of taxable goods/services Eligible as specifically included in definition Specifically excluded Hence not eligible except for construction or works contract service Eligible only if done as a statutory requirement (since it can be argued that the service is used in relation to manufacture, as manufacture would be impossible if the statutory requirement is not met) or if in relation to modernization or renovation of

Credit rating

Customs House Agent

Depot expenses

Erection, commissioning or installation Financing (Bank charges, Lease, Hire Purchase) Foundation or support of capital goods

Gardening

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factory or office, otherwise not eligible. General Insurance for machinery, building and transportation of inputs, capital goods and final products upto place of removal (except motor vehicle see discussions above for meaning of motor vehicle) General Insurance of motor vehicles Eligible as in relation to manufacture, provision of taxable services, procurement of inputs, transportation of inputs and final products

Specifically excluded Hence not eligible except where motor vehicle is eligible as capital goods see discussions above for meaning of motor vehicle Insurance of employees not eligible [Insurance of a director
(who is not employee) would be eligible]

Health Insurance

Hire purchase Information Technology Software

Eligible under Financing Eligible if in relation to manufacture or provision of taxable goods/services, moderniaation or repairs of factory or office, storage, quality control, recruitment, accounts, audit, sales promotion, procurement of inputs, legal services, financing, computer networking Eligible as in relation to manufacture, provision of taxable services, procurement of inputs, transportation of inputs and final products.

Insurance for machinery, building and transportation of inputs, capital goods and final products upto place of removal (except insurance of motor vehicle) Insurance (Life or Health)

Insurance of employees not eligible [Insurance of a director

(who is not employee) would be eligible]

Intellectual Property Service

Eligible if in relation to manufacture or provision of taxable goods/services, quality

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control, sales promotion, computer networking Inward transport

Specifically included under Inward transportation of inputs or capital goods

Job work

Eligible if in relation to manufacture or provision of taxable goods/services, modernization or repairs of factory or office, storage, quality control, computer networking Eligible if in relation to manufacture or provision of service or modernization or repairs of factory or office, accounts, financing, procurement of inputs, sales promotion, inward and outward transportation, share registry, recruitment, legal services Covered under Financing. Hence eligible
Specifically included under legal services

Labour contractor

Leasing
Legal Consultancy

Life Insurance

Insurance of employees not eligible [Insurance of a director

(who is not employee) would be eligible]

Maintenance and repairs

Eligible if in relation to manufacture or provision of taxable goods/services, modernization or repairs of factory or office, storage, quality control, except of motor vehicles (see discussions above for meaning of motor vehicle) Eligible if in relation to recruitment, accounts, audit, sales promotion, procurement of inputs, legal services, financing, computer networking

Mandap Keeper

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Manpower recruitment and supply

Eligible if in relation to manufacture or provision of taxable goods/services, modernization or repairs of factory or office, recruitment, storage, quality control, accounts, sales promotion, financing, computer networking Eligible as specifically included in definition Eligible if related to modernization or repairs of factory or office, accounts, financing, procurement of inputs, sales promotion, inward and outward transportation, share registry, recruitment, legal services but not for personal use of employees Specifically excluded Hence not eligible except where motor vehicle is eligible as capital goods (see discussions above for meaning of motor vehicle) Not eligible when given to employee should be eligible if used for sales promotion, training, auditing (e.g. giving lunch to auditors), legal services, security or to directors who are not employees
Outward transportation upto the place of removal is eligible

Market Research Mobile phones (even if in name of employees, if endorsed in favour of employer and reimbursed by employer)

Motor Vehicle Related Expenses (earlier termed as authorised station services)

Outdoor catering

Outward transportation

(see meaning of place of removal discussed earlier) Personal Insurance of employees Port Service Not eligible
Not eligible if used for construction of a building or a civil structure or a part thereof, or laying of foundation or making of structures for support of capital

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goods. If the service is used for other purposes, e.g. provided to CHA, ships, importers/exporters, these should be eligible.

The service is also eligible in case of construction or works contract services or port or airport services. Procurement Expenses Quality Control Realer Estate Agent service Recruitment Renovation of factory or office building Eligible under Procurement of inputs Eligible as specifically included in definition May not be eligible Eligible as specifically included in definition Renovation of a factory, premises of provider of output service or an office relating to such factory or premises is eligible Specifically excluded Hence not eligible except where motor vehicle is eligible as capital goods - see discussions above for meaning of motor vehicle (may be eligible if charged by auditor, legal adviser or consulting engineer as part of their services, but they themselves will not be eligible for Cenvat credit on these services) Eligible if in relation to manufacture or provision of taxable goods/services, modernization or repairs of factory or office, storage, quality control, recruitment, accounts, audit, sales promotion, procurement of inputs, legal services, financing, computer networking Repairs of a factory, premises of provider of output service

Renting of a cab

Renting of immovable property

Repairs of factory or office building

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or an office relating to such factory or premises are eligible Repairs of motor vehicles Specifically excluded Hence not eligible except where motor vehicle is eligible as capital goods see discussions above for meaning of motor vehicle Not eligible except security and legal services Specifically excluded Hence not eligible except for construction or works contract service Eligible as specifically included in definition Eligible as specifically included in definition as
Security (no restriction where used) Share registry

Residential Colony/quarters Expenses Residential Complex

Sales Promotion Expenses

Security at factory, offices, godown, residential colonies

Eligible as specifically included in definition Eligible as sale promotion Eligible if in relation to manufacture or provision of taxable goods/services, modernization or repairs of factory or office, storage, quality control, recruitment, accounts, audit, sales promotion, financing, computer networking Eligible as specifically included in definition as Storage upto place of removal Eligible if in relation to manufacture or provision of taxable goods/services, modernization or repairs of factory or office, storage, quality control, recruitment, accounts, audit, sales

Showroom Expenses Software

Storage of inputs and final products

Supply of tangible goods for use service

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promotion, procurement of inputs, legal services, financing, computer networking. However, supply of motor vehicle for use is not eligible see discussions above for meaning of motor vehicle. Telephones and telephones at residence of employees Eligible if related to modernization or repairs of factory or office, accounts, financing, procurement of inputs, sales promotion, inward and outward transportation, share registry, recruitment, legal services but not for personal use of employees Eligible as specifically included in definition Not eligible as specifically excluded Eligible if in relation to manufacture or provision of taxable goods/services, modernization or repairs of factory or office, storage, quality control, recruitment, accounts, audit, sales promotion, procurement of inputs, legal services, financing, computer networking
Not eligible if used for construction of a building or a civil structure or a part thereof, or laying of foundation or making of structures for support of capital goods. If the service is used for other purposes, e.g. finishing services, repair, alteration or restoration, these should be eligible.

Training Transport charges for transport of employees Travel by air, road or water except by motor vehicle

Works Contract Service

The service is also eligible in case of construction or works contract services or port or airport services.

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*****

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