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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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dateyvs. If the definition uses the word “means” it means that it is restrictive and exhaustive. v. in relation to manufacture or clearance of final product upto the place of removal. i.com/article_8. P Mohammed Ali . M K Gupta (1994) 1 SCC 243 = 1994 AIR SCW 97 = AIR 1994 SC 787 = 80 Comp Cas 714 (SC) * Feroze N Dotivala v. and. such definition is to be given a wider meaning and not exhaustive or restricted to the items contained in the definition .com 122 = 260 ELT 321 (SC)] 1-3 Meaning of ‘in relation to’ 2 of 17 2/23/2012 10:51 PM . v. but to enable the word as used in the Act to be applied to some things to which it would be normally not applicable’ . An interpretation clause which extends the meaning of a word does not take away its ordinary meaning.htm The definition of ‘input service’ is broadly in three parts – First is main part.AIR 1994 SC 120 = 1993 AIR SCW 3754 = 1993 (3) SCC (Supp) 627.In Maruti Suzuki Ltd. Taj Mahal Hotel . State of AP (2008) 12 VST 459 (SC) * K N Farms Industries v. First part of the definition is restrictive in scope as it covers input services used for providing taxable output service or used by manufacturer.(1971) 3 SCC 550 = AIR 1972 SC 168 = (1971) 82 ITR 44 (SC) * Municipal Corporation v. IDecision in Maruti Suzuki restricting scope of ‘includes’ doubted and issue referred to large bench .(1991) 3 SCC 617 = AIR 1991 SC 129 = 1991 AIR SCW 2821 (3 member bench) * CIT v. inclusive part of the definition expands the scope much beyond the coverage of first part. directly or indirectly. P M Wadhwani 2002 AIR SCW 4904. CCE (2010) 29 STT 464 = 8 taxmann. v.AIR 1991 SC 686 = (1991) Supp 2 SCC 18 * S K Gupta v. In Forest Range Officer v. 1-2 Meaning of ‘includes’ Definitions are ‘inclusive’ or ‘exhaustive’. second is inclusive part and third part covers exclusions. it expands the meaning .e. 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. CCE (2009) 9 SCC 193 = 22 STT 54 = 240 ELT 641 (SC). CTO 1997 AIR SCW 3654 = (1997) 107 STC 219 (SC) = AIR 1997 SC 3550. UOI 2004 (167) ELT 3 = 4 STT 308 = 267 ITR 9 = 136 Taxman 596 = 135 STC 480 (SC) * Ponds India v. popular and natural sense wherever that would properly be applicable. Its Employees AIR 1960 SC 675. it was observed : ‘Includes’ is used as extension.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. In Corporation of City of Nagpur v. State of Bihar AIR 2009 SC 3031. inclusive part of definition of ‘input’.Article 8 http://www.1993 AIR SCW 762 = 1993 Supp (3) SCC 361(II) (SC) * Tamil Nadu Kalyana Mandapam Association v. where it was held that inclusive part of definition cannot prevent the main provision from receiving its natural meaning. K P Jain (1979) 3 SCC 54 * Narmada Bachao Andolan v. it means that the definition is not exhaustive but it is inclusive. relation with ‘manufacture’ is required – in appeal from Maruti Suzuki Ltd. Shanker Industries . [This view has been doubted and the matter has been referred to a large bench in Ramala Sahkari Chini Mills v. Highland Coffee Works . CCE (2009) 238 ELT 180 (CESTAT). Indian Oil Corpn . therefore.Doypack Systems (P.) Ltd. However. Second i. it was held : ‘The inclusive definition is a well recognised devise to enlarge the meaning of the word defined. When the word used is ‘includes’.e. An interpretation clause of inclusive definition is not meant to prevent the word receiving its ordinary. UOI (1988) 2 SCR 962 = (1988) 2 SCC 299 = 65 Comp Cas 1 = 36 ELT 201 = AIR 1988 SC 782 * Lucknow Development Authority v. The third part covers specific exclusions.e.same view in Black Diamond Beverages v. Rajasthan Taxchem Ltd.Krishi Utpadan Mandi Samiti v. (2007) 3 SCC 124 = 5 VST 529 = 209 ELT 165 (SC) * Karnataka Bank Ltd. v. ESIC v. CTT (2008) 227 ELT 497 = 15 VST 256 (SC). if the word “include/s” is used in definition. UOI AIR 2005 SC 2994 (SC 3 member bench) * CTO v.

which pre-supposes another subject matter. The words ‘from where such goods are removed’ apply to all the three clauses. These are words of comprehension which might both have a direct significance as well as an indirect significance depending on the context. depot is place of removal. '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. . It has been clarified that in case of depot sale.4 dated 2-2-2006 has confirmed that when the words ‘place of removal’ are not defined in Finance Act. 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. a warehouse or any other place or premises wherein the excisable goods have been permitted to be deposited without payment of duty. v. CBE&C vide circular No. definition under Central Excise Act is to be considered.com 28 = 4 GST 72 = 36 VST 1 = 262 ELT 32 (SC 5 member bench). -. . Hence. a depot. UOI 2004 (167) ELT 3 = 4 STT 308 = 267 ITR 9 = 136 Taxman 596 = 135 STC 480 (SC) CCE v. The expression ‘pertaining to’ is an expression of expansion and not of contraction . Steel Authority of India 1999 AIR SCW 4016 = AIR 1999 SC 3923 = 1999 (6) SCC 334.State Waqf Board v.com/article_8.htm Scope of inclusive part of definition of input service is further widened by use of the term ‘in relation to’. ‘sale’ and ‘purchase’ with their grammatical variations and cognate expressions.Article 8 http://www. 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. 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. The expression ‘in relation to’ is of widest import. Solaris Chemtech (2007) 7 SCC 347 = 9 STT 412 = 214 ELT 481 (SC). – Thyssen Stahlunion GMBH v.‘Relating to’ is equivalent to or synonymous with as to ‘concerning with’ and ‘pertaining to’. Azad Coach Builders (2010) 9 SCC 524 = 7 taxmann. The expression ‘in relation to’ (so also ‘pertaining to’) is a very broad expression. As per section 2(h) of Central Excise Act.dateyvs. 2 Place of removal The concept of ‘removal’ is borrowed from Central Excise and hence applies only to a manufacturer and not service provider. 137/3/2006-CX. Abdul Azeer Sahib (1967) 1 MLJ 190 = AIR 1968 Mad 79 * State of Karnataka v. 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.Doypack Systems P Ltd. 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. 2-1 Place of where ownership gets transferred to buyer is place of removal when there is direct sale from factory 3 of 17 2/23/2012 10:51 PM .

handling and insurance charges upto warehouse incurred by assessee will be includible in the Assessable Value. CCE (2007) 215 ELT 515 = 2007 TIOL 930 (CESTAT) – quoted and followed in Rajasthan Spinning & Weaving Mills v.Article 8 http://www. though decision in case of Escorts JCB has been reversed by SC on different ground. Ownership in the property may not have relevance in so far as insurance of goods sold during the transit is concerned. CCE (2007) 8 STR 575 (CESTAT). 2-2 ‘Place of removal’ if ownership is transferred at destination In Escorts JCB Ltd. CCE (2008) 223 ELT 481 (CESTAT SMB) * CCE v. Prabhat Zarda Factory Ltd. It was held that as per section 39 of Sale of Goods Act. that will be treated as ‘place of removal’ in terms of section 4(3)(c)(ii). Goods were handed over to the carrier/transporter. buyer’s place will be the ‘place of removal’ and hence insurance and freight will be includible in the price. factory gate is place of removal. Adani Pharmachem (2009) 19 STT 239 = 238 ELT 179 (CESTAT SMB) * Modern Petrofils v. CCE 2000(118) ELT 650 = 35 RLT 9 (CEGAT). transit insurance is borne by assessee and property in goods is not transferred till delivery. The term ‘warehouse’ has restricted meaning.htm Normally. CCE (2003) 1 SCC 281 = 53 RLT 1 = 146 ELT 31 (SC). If goods are sold only when they reach the destination. takes place when ownership in goods is transferred to buyer at destination. 2000(119) ELT 191 = 38 RLT 637 (CEGAT 5 member bench). the contract was for sale ex-factory. price is FOR destination. In Ambuja Cements v. port is the ‘place of removal’ as exporter continues to be owner of goods till the same are exported. it was observed. In such case. except in case of depot sales. it has been held that if freight charges form part of assessable value. transport. that will be the ‘place of removal’ (except in case of depot sales). However. insurance was arranged by assessee. Port is the place of removal in exports as property gets transferred to buyer at port – RSWM v. transfer of possession of goods is the essence of sale. Rolex Rings (2008) 230 ELT 569 (CESTAT SMB). CCE (2010) 24 STT 400 = 257 ELT 152 (CESTAT SMB). CCE 2000(118) ELT 650 = 35 RLT 9 (CEGAT)] However. [In my opinion. it has been held that in case of exports. where it was held that as per definition of 'sale' u/s 2(h) of CEA.dateyvs.'Place where excisable goods are sold can be place of removal. the customer’s place will be ‘place of removal’). v. [Reversing decision of CEGAT in Escorts JCB Ltd. (thus. delivery of goods to carrier is prima facie delivery of goods to buyer. This view was rejected by SC. In Escorts JCB Ltd.e. Hence. though charged separately. v. if ownership of goods remains with seller till delivery at customer’s doorstep. – view confirmed in CCE v. outward transportation is ‘input service’ and is eligible for Cenvat credit. It was contended by department that since insurance is arranged by seller. if ‘sale’ i. Hence. as follows . UOI (2009) 236 ELT 431 (P&H HC DB). A place where goods are sold can be a place where the property in goods sold passes from buyer to seller. It is confined only those warehouses which are 4 of 17 2/23/2012 10:51 PM . v. In CCE v. 2-4 Meaning of ‘Warehouse’ If goods are sold from warehouse. the place of removal is port where export documents are presented to customs office – Kuntal Granites v. the principle discussed above is still valid]. CCE (2010) 253 ELT 609 (CESTAT SMB) * Cauvery Stones v. that will be the place of removal’. 2-3 Port is place of removal in case of exports In case of exports. the property in goods passes to buyer only when goods reach the destination. in respect of provisions under old section 4. CHA and surveyor services which are relating to export business are eligible for Cenvat credit.com/article_8. It is not necessary that insurance of the goods and ownership of goods must always go together.

Article 8 http://www.com/article_8.2 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. 3.htm notified under rule 20. Architect Service will be eligible as input service if used for Port Service or Construction Service or Works Contract Service.g. If these are used for other purposes. Port or airport services provided to aircraft or renting would be eligible. Thus. these should be eligible. e. 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’. 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. CCE 2005 (179) ELT 39 (CESTAT SMB). Further. Services specifically excluded from definition of ‘input service’ Some services have been specifically excluded from definition of ‘input service’.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. These would not be eligible even if these would be eligible as per inclusive part of the definition of ‘input service’. 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 5 of 17 2/23/2012 10:51 PM . these services would not be eligible only if they are used for construction of a building or a civil structure or a part thereof. 3. finishing services.g. repair.dateyvs. or laying of foundation or making of structures for support of capital goods. alteration or restoration. e. where goods can be kept without payment of duty – Roha Dyechem v. 3.

What is wasteful expenditure as per the revised definition of input service As per the revised definition of input service. For example. For example. ‘motor vehicles’ are covered under chapter 87 of Central Excise Tariff. 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] 6 of 17 2/23/2012 10:51 PM . * Factory and office building (We are a free society. the credit of service tax paid on such outdoor catering would be available as credit to M/s X. but they fall under chapter 84 of Central Excise Tariff. health insurance and travel benefits extended to employees on vacation such as Leave or Home Travel Concession have been specifically excluded. this exclusion is only when such services are used primarily for personal use or consumption of any employee. membership of a club. fork lift truck. as per department’s view. Meaning of motor vehicle – The term ‘motor vehicle’ is not defined in Cenvat Credit Rules.com/article_8. Indians do every conceivable thing in open. insurance. there will be some employees of M/s X who will also take lunch or dinner along with the distributors.dateyvs. Hence.htm Goods’ for Cenvat Credit). in respect of such vehicles should be eligible for Cenvat credit. cosmetic and plastic surgery. Corporate club membership (without naming any specific employee) should be eligible. 4. As per section 65(73) of Finance Act. excavators) require registration under Motor Vehicles Act. The condition that these services must be used primarily for personal use or consumption of employees is essential. However.g. 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. say the company X organises Distributor’s conference in which service of outdoor catering is obtained. This exclusion will not apply in other cases. repair services. Goods falling under chapter 84 are eligible for Cenvat credit. outdoor catering for ‘sales promotion’ would be eligible. ‘motor vehicle’ has same meaning as assigned to it under section 2(28) of Motor Vehicles Act. The services of outdoor catering are provided as incidental to Distributor’s conference. As per that Act. Club membership fee of a director (who is not employee) would be eligible.Article 8 http://www.3 Services specifically excluded under clause (C) Certain services like outdoor catering. Therefore. 1994. beauty treatment. life insurance. 3. As per Central Excise Tariff Act. ‘motor vehicle’ means any mechanically propelled vehicle adapted for use upon roads. The services are not primarily meant for personal use. following is the wasteful expenditure and do not deserve any Cenvat credit. In the Distributor’s conference. health services. health and fitness centre. Some vehicles (e. 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. Hence. renting etc.

g. canteen facility. welfare expenditure is a pure waste [Company should employ only casual labour at minimum wages with no benefits]. it would be eligible. sales promotion. Service Accounting Expenses Advertisement (may be for recruitment. Of course. insurance. quality control. litigation is inevitable in many cases. or laying of foundation or making of 7 of 17 2/23/2012 10:51 PM . provided to importer/exporter or to CHA. or laying of foundation or making of structures for support of capital goods. 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. tenders. Airport Service The service is also eligible in case of construction or works contract services or port or airport services. e.com/article_8. financing. modernization or repairs of factory or office. for aircrafts. Eligibility of various services as input services Based on aforesaid discussions. computer networking Not eligible if used for construction of a building or a civil structure or a part thereof. Architect Services Not eligible if used for construction of a building or a civil structure or a part thereof. recruitment. If the service is used for other purposes. following is summary of various input services eligible and not eligible. legal notices etc. procurement of inputs.dateyvs. legal services. storage.htm * All employee benefits line transport. sales promotion. accounts. audit. 5. health care.Article 8 http://www.

htm structures for support of capital goods. financing. these should be eligible. accounts.g. quality control. audit. legal services. e.dateyvs. finishing services. recruitment. 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 8 of 17 2/23/2012 10:51 PM . 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.com/article_8. repair. modernization or repairs of factory or office. The service is also eligible in case of construction or works contract services or port or airport services. If the service is used for other purposes. sales promotion. storage. procurement of inputs.Article 8 http://www. alteration or restoration.

finishing services.g. 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 Agent’s expenses Eligible as consignment agent’s 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. finishing services. e. alteration or restoration. If the service is used for other purposes.Article 8 http://www. Similarly.com/article_8. these should be eligible. these should be eligible. management Eligible if in relation to manufacture or provision of 9 of 17 2/23/2012 10:51 PM . The service is also eligible in case of construction or works contract services or port or airport services.htm director (who is not employee) would be eligible. If the service is used for other purposes. Consulting – Engineering.g. or laying of foundation or making of structures for support of capital goods.dateyvs. 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. alteration or restoration. e. repair. repair.

commissioning or installation Financing (Bank charges. Hire Purchase) Foundation or support of capital goods Gardening 10 of 17 2/23/2012 10:51 PM . 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. computer networking Courier Eligible if related to modernization or repairs of factory or office. modernization or repairs of factory or office. 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.htm taxable goods/services. Lease. recruitment. financing. audit. 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. inward and outward transportation. recruitment. procurement of inputs. financing.Article 8 http://www. share registry. accounts. In other cases.com/article_8. sales promotion. legal services. accounts. quality control.dateyvs. storage. sales promotion. procurement of inputs.

provision of taxable services. provision of taxable services. procurement of inputs. recruitment. storage. 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. 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.Article 8 http://www. procurement of inputs.htm factory or office. transportation of inputs and final products. legal services. computer networking Eligible as in relation to manufacture. quality control. audit. 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. financing. procurement of inputs.dateyvs.com/article_8. moderniaation or repairs of factory or office. building and transportation of inputs. accounts. Insurance for machinery. otherwise not eligible. sales promotion. General Insurance for machinery. building and transportation of inputs. quality 11 of 17 2/23/2012 10:51 PM .

Article 8 http://www. computer networking Mandap Keeper 12 of 17 2/23/2012 10:51 PM . procurement of inputs. modernization or repairs of factory or office. procurement of inputs. except of motor vehicles (see discussions above for meaning of ‘motor vehicle’) Eligible if in relation to recruitment. sales promotion. share registry.dateyvs. modernization or repairs of factory or office. 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.htm control.com/article_8. quality control. 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. storage. accounts. quality control. sales promotion. recruitment. financing. legal services. inward and outward transportation. financing. accounts. computer networking Eligible if in relation to manufacture or provision of service or modernization or repairs of factory or office. storage. audit. legal services Covered under ‘Financing’. sales promotion.

giving lunch to auditors). auditing (e. financing. inward and outward transportation. recruitment. or laying of foundation or making of structures for support of capital 13 of 17 2/23/2012 10:51 PM .htm Manpower recruitment and supply Eligible if in relation to manufacture or provision of taxable goods/services. training. accounts. modernization or repairs of factory or office. sales promotion.dateyvs. accounts. storage.com/article_8. financing. recruitment. quality control. legal services. procurement of inputs. sales promotion.g. 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. computer networking Eligible as specifically included in definition Eligible if related to modernization or repairs of factory or office. 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. 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.Article 8 http://www. share registry.

If the service is used for other purposes. recruitment. 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 . 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. these should be eligible.com/article_8. e. legal services. premises of provider of output service Renting of a cab Renting of immovable property Repairs of factory or office building 14 of 17 2/23/2012 10:51 PM . storage. accounts. legal adviser or consulting engineer as part of their services. ships.dateyvs. computer networking Repairs of a factory. provided to CHA. financing. quality control.htm goods. sales promotion. audit. 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. The service is also eligible in case of construction or works contract services or port or airport services.– see discussions above for meaning of ‘motor vehicle’ (may be eligible if charged by auditor. importers/exporters.g.Article 8 http://www. modernization or repairs of factory or office. procurement of inputs.

htm 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.com/article_8. sales promotion. storage. modernization or repairs of factory or office. 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.dateyvs. quality control.Article 8 http://www. 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. quality control. recruitment. accounts. recruitment. offices. audit. storage. financing. audit. accounts. sales Showroom Expenses Software Storage of inputs and final products Supply of tangible goods for use service 15 of 17 2/23/2012 10:51 PM . godown.

procurement of inputs. sales promotion. sales promotion. or laying of foundation or making of structures for support of capital goods. procurement of inputs. accounts. repair. Training Transport charges for transport of employees Travel by air.g.Article 8 http://www.dateyvs. legal services.htm promotion. supply of motor vehicle for use is not eligible – see discussions above for meaning of ‘motor vehicle’. 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. Telephones and telephones at residence of employees Eligible if related to modernization or repairs of factory or office. finishing services. quality control. legal services. 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. 16 of 17 2/23/2012 10:51 PM . If the service is used for other purposes. alteration or restoration. inward and outward transportation. recruitment. these should be eligible. audit. computer networking. computer networking Not eligible if used for construction of a building or a civil structure or a part thereof. storage. accounts. procurement of inputs. financing. financing. However. e.com/article_8. modernization or repairs of factory or office. share registry. financing. recruitment.

dateyvs.com/article_8.Article 8 http://www.htm ***** 17 of 17 2/23/2012 10:51 PM .