Admissibility of credit on Mobile phone bills, travelling expenses, Expenses of accommodation in hotel rooms and Food Bills.

PJ/Case Study/2018-19/144

CASE STUDY
M/s Raj & Associates OIA No. 55(CRM)ST/JDR/2019
Prepared By: Adit Gupta

Introduction: M/s Raj & Associates, (hereinafter referred to as appellant) are engaged in providing taxable services namely Consulting Engineer Services. Appellant are holder of service tax registration no. AAQPB2852BST001. A Show Cause Notice was issued to the appellant alleging that the appellant has taken the Input tax Credit on Mobile phone bills, travelling expenses, Expenses relating to accommodation in hotel rooms and Food Bills which is not admissible as per the definition of Input Services defined in Rule 2(I) of Cenvat Credit Rules, 2004. However the Rule 2(I) of Cenvat Credit Rules, 2004 was amended by Notification No. 28/2012- Central Excise (N.T.) dated 20.06.2012. The Adjudicating Authority allowed the appellant to take credit on the Mobile phone Bills. However for the other input services the availment of Credit was said to be as wrong. Thus, aggrieved by the Order in Original, the appellant decided to file an appeal to the Commissioner Appeals. Eventually it was held that Service tax Credit on Food Bills along with Interest and Penalty shall be paid. As far as other input Services that are mentioned above, are concerned, the Commissioner set aside the Service tax credit demand.
Relevant Legal Provisions:

Section 85 of the Finance Act, 1994.
Rule 2(I) of Cenvat Credit Rules, 2004.
Notification No. 28/2012- Central Excise (N.T.) dated 20.06.2012.
Rule 14 of Cenvat Credit Rules, 2004.
Rule 15(3) of the Cenvat Credit Rules, 2004.
Section 78 of the Finance Act, 1994.

Issue Involved: Admissibility of credit on Mobile phone bills, travelling expenses, Expenses of accommodation in hotel rooms and Food Bills.

Brief Facts:M/s Raj & Associates, (hereinafter referred to as appellant) are engaged in providing taxable services namely Consulting Engineer Services. Appellant are holder of service tax registration no. AAQPB2852BST001. A show cause notice no. IAR/1758/Gr.L-2/JDR/2016-17/293 dt 06.09.2017 was issued to the appellant alleging that they have wrongly utilized the Cenvat credit of service tax of Rs. 1,48,868/- during the period from 2012-13 to September, 2016. It was proposed to recover the same alongwith interest and penalty. The appellant replied to the above Show Cause notice issued to them vide their letter dated 20.12.2017. The personal hearing in the matter was convened on 20.12.2017 which was attended by Shri Pradeep Jain on behalf of the appellant wherein the submissions already made in the reply to the show cause notice were reiterated. The submissions of the appellant were not adhered completely and the impugned order in original no. 37/2017-ST dated 22.12.2017 was passed wherein the cenvat credit to the extent of Rs. 51,658/- pertaining to mobile phone was allowed whereas the demand of cenvat credit amounting to Rs. 97,210/- on the travelling, food and hotel bills was confirmed along with interest and penalty of Rs. 97,210/- under Rule 15(3) of the Cenvat Credit Rules, 2004, read with the section 78 of the Finance Act, 1994. Aggrieved by the impugned order in original, confirming the demand of cenvat credit along with interest and penalty, the appellant prefer to filed this appeal to the Commissioner Appeals.

Assessee’s Contention:

The impugned order in original confirming the service tax demand along with interest and penalty is wholly and totally erroneous and is liable to be set aside.

The impugned order has denied credit availment on travelling, food, hotel bills on the grounds that the said services have been availed for personal use of the employees and is not eligible for credit. In this regard, the appellant submits that the definition of input service given under Rule 2(l) of the Cenvat Credit Rules, 2004 excludes travel benefits extended to employees on vacation such as LTC when such services are primarily for personal use but does not exclude said services when availed for business use or for providing taxable output service. The appellant submit that the restriction is only as regards credit availment of services that are for personal use of employees but in the instant case, the services of travelling, hotel and food are availed due to business purpose and the same is legally admissible to the appellant. As such, the impugned order denying the said cenvat credit is not at all proper and deserves to be set aside.

CREDIT AVAILED ON TRAVELLING EXPENSES:-The appellant submits that the impugned order has alleged that the stand taken by the appellant on cenvat credit of travelling expenses is covered under the exclusion clause of Rule 2(l) of the Cenvat Credit Rules, 2004 and this change was made effective vide Notification No.28/2012-Central Excise (N.T) dated 20.06.2012, before this definition of input service was wide and decisions quoted by the appellant pertains to prior period but in the instant case it is not applicable as the demand pertains to period 2012-13 to September, 2016. Therefore, cenvat credit on service tax paid on travelling expenses is not admissible. In this regards, the appellant submits that travelling expenses is a part of market research expenses on which cenvat credit is admissible under Rule 2(l) of the Cenvat Credit Rules, 2004 as amended by the Notification No.28/2012-Central Excise (N.T) dated 20.06.2012 applicable from 1^st July, 2012, which clearly states that input services includes market research and on which credit is admissible and shall also be applicable in the instant case. Furthermore, the travelling expenses are not of personal nature and rather the said expenses are in relation to provision of taxable output service. Moreover,the appellant submits that extended period of limitation is not invocable in their case since the credit availment of service tax on travelling services was based on a number of decisions rendered by various Tribunals which were produced in the reply to show cause notice. Also, there was bonafide belief regarding availment of cenvat credit on such services based on the judgments. The reliance was placed on the judgments which were not discussed by the impugned order outrightly stating that decisions quoted by the appellant pertains to prior period and are not applicable to appellant as demand pertains to period 2012-13 to September, 2016, in this respect it is submitted that for relying upon a case, the facts need not be identical; however, the resemblance drawn while deciding the case should be applicable. The ratio of the decision is to be observed while deciding whether the case is applicable in the present case or not but the learned adjudicating authority has distinguished the applicability of the relied upon case on the basis of facts of the case. The judgments on which reliance was placed are reproduced as under:

IN RE: DBS CHOLAMANDALAM SECURITIES LTD. [2012 (286) E.L.T. 475 (Commr. Appl.)]:-

Cenvat credit - Input service credit - Stock Exchange services - Employees insurance, food charges, subscription/books/periodicals and travelling expenses - Issue already settled in Ultratech Cement Ltd. [2010 (20) S.T.R. 577 (Bom.)] - Services utilized during course of business activity - Assessee eligible to Cenvat credit - Rule 2(l) of Cenvat Credit Rules, 2004. [para 5.4]

KODAK INDIA PVT. LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, INDORE [2012 (280) E.L.T. 453 (Tri. - Del.)]:-

Stay/Dispensation of pre-deposit - Cenvat - Input services - Telephone, courier and travelling expenses - Used by assessee for furtherance of business activities in factory premises - Prima facie, assessee is entitled to credit of Service tax paid on such services - Pleas that these were not covered by definition of input service and there was no nexus with manufacturing activities, rejected - Rule 2(1) of Cenvat Credit Rules, 2004 - Section 35F of Central Excise Act, 1944. [paras 4, 6]

JINDAL PIPES LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, MEERUT-II [2013 (30) S.T.R. 473 (Tri. - Del.)]:-

Stay/Dispensation of pre-deposit - Cenvat credit on Service Tax - Input service - Impugned order not specifying category under which Service Tax paid by service provider - Services of travelling agents for arranging official tours & travels of staff and office maintenance service having nexus to manufacturing activity, eligible for Cenvat credit - Pre-deposit of dues waived - Section 35F of Central Excise Act, 1944 as applicable to Service Tax vide Section 83 of Finance Act, 1994. [para 6]

In light of the above cited decisions, it is clear that cenvat credit of service tax is admissible on travelling expenses and the impugned order in original denying the cenvat credit deserves to be set aside.

CREDIT AVAILED ON HOTEL ROOMS: -In continuation to above it is submitted that the impugned order has not allowed the cenvat credit on hotel rooms. The appellant submits that as they have already stated that they are required to travel a lot for gathering information regarding products launched in the market, accommodation services are also important input service for provision of taxable output service. Therefore, they are eligible to avail cenvat credit of service tax paid by them on accommodation services and the impugned order in original is liable to be quashed. The appellant submits that impugned order also stated that it was included in exclusion part of the definition input service which was amended by the Notification No.28/2012-Central Excise (N.T) dated 20.06.2012 applicable from 1^st July, 2012, but in reality, there is no specific exclusion for availing credit of accommodation services. Hence, the allegation that the credit availed on hotel rooms is not as per the provisions of Rule 2(l) of the Cenvat Credit Rules, 2004 is not at all tenable and deserves to be quashed.

Further, the impugned order rejected the reliance placed on the various cases stating that the facts of the case are not identical. In this regard, the appellant submit that for placing reliance on a case, the facts need not be identical; however, the analogy drawn while deciding the case is important. In the instant case, some were slightly different in facts and circumstances; however, the ratio of even those decisions was applicable on the basis of principle of ratio decidendi. All decisions were discussed and analyzed by the appellant bringing out the ratio laid down by each judgment and benefit of those decisions was equally extendable by applying the principle of ratio decidendi which means that while interpreting any decision, ratio laid down by it has to be seen rather than going rigidly by the facts and circumstances. The ratio decidendi is "the point in a case that determines the judgment" or "the principle that the case establishes". In other words, ratio decidendi is a legal rule derived from, and consistent with, those parts of legal reasoning within a judgment on which the outcome of the case depends. It has been held by the Gujarat High Court that it is the ratio decidendi that forms a binding precedent, not the entire facts and circumstances of the case. This decision has been given in the following case:-

DHRANGADHRA MUNICIPALITY, DHRANGADHRA AND OTHERS VERSUS DHRANGADHRA CHEMICAL WORKS LTD. AND OTHERS [1988 (35) E.L.T. 88 (GUJARAT)]

Precedent - Ratio decidendi constitutes a precedent and not the entire contents of a judgment.

- It is not everything said by a judge when giving judgment that constitutes a precedent. The only thing in a judge’s decision binding a party is the principle upon which the case is decided and for this reason, it is important to analyse a decision and isolate from it, the ratio decidendi. [A.I.R. 1979 S.C. 1384 cited; XXIV (1) G.L.R. 1 & A.I.R. 1987 S.C. 1073 referred]. [para 27]

From the above decision, it is ample clear that while interpreting any decision, one has to see the ratio laid down by the Court rather than by looking into the facts and circumstances. If the ratio decidendi is applicable, the benefit of decision is equally extendable to the assessee. However, in the instant case, the impugned order has simply brushed aside these cases by alleging that the facts and circumstances of these cases are not applicable in the given case. Such an interpretation is not tenable and the impugned order is liable to be set aside.

It has further been alleged by the impugned order that assessee has not filed their periodical returns correctly, thus it was not possible for the scrutiny officer to detect the nature of cenvat credit of such amount, assessee has thus suppressed the information from the department. During the course of scrutiny by the department of financial records and on demand for further details, the department came to know about the facts. It goes without saying that had the assessee been not examined, department could have never known about ineligible credit. In this regards, the appellant submits that as per definition of input services provided under Rule 2 (l) of CENVAT Credit Rules, 2004, input service means any service used by provider of output service for providing an output service and they have justified that the said services were used for providing consulting engineer services. The cenvat credit taken on such services were shown in return under the head CENVAT credit taken and utilised, however, looking at the format of service tax return, consolidated amount was reflected by them as it was not possible for the appellant to show the cenvat credit of each and every service separately. Thus, the appellant has filed their periodical returns correctly, as it was not possible for the appellant to show the nature of cenvat credit taken on different expenses in the service tax return. Therefore, it cannot tantamount to suppression of the information from the department as it is the format which does not allow the appellant to show the nature of the cenvat credit taken and utilised.

The appellant, thus, submits that the extended period of limitation is not invocable in their case as the credit availment of service tax was based on a number of decisions rendered by various Tribunals. As such, there was bonafide belief regarding availment of cenvat credit on such services availed.

The appellant also submits that there is no provision in the service tax law which states that the appellant is required to furnish the details of nature of various input services for which cenvat credit has been availed by them under self assessment basis. It has been held by hon’ble Gujarat High Court in the case of APEX ELECTRICALS PVT. LTD. VERSUS UNION OF INDIA [1992 (61) E.L.T. 413 (Guj.)] that non-furnishing of the information not required under law does not amount to suppression. The verdicts of hon’ble High Court are given as follows:-

“Demand - Limitation - Suppression - Information not required to be supplied under law if not supplied does not amount to suppression - Proviso to Section 11A(1) of Central Excises and Salt Act, 1944.”
Similar decision was given in the following cases:-

GUFIC PHARMA VS. CCE - 1996 (85) ELT 67 (T) [AFFIRMED BY SUPREME COURT AT 1997 (93) ELT A186]
PROLITE ENGINEERING CO. VS UNION OF INDIA [1995 (75) ELT 257 (GUJ.)]
UNIQUE RESIN INDUSTRIES VS. CCE - 1995 (75) ELT 861 (T)

In all the above cases, it was held that the information not required to be submitted under law, if not submitted, will not amount to suppression of facts. Thus the impugned order in original invoking the extended period of limitation on the grounds that if scrutiny was not done, the short payment would not have been detected is not at all tenable and is liable to be set aside.

It is further submitted that the impugned order has not discussed and distinguished the case laws cited by the appellant. However, it has cited various other decisions of hon'ble Supreme Court and Tribunals. In this regard, it is submitted that these decisions are also not identical to the facts and circumstances of the case. Therefore, the impugned order is contradicting its own words given while distinguishing the case laws cited by the appellant. It has not accepted the decisions cited by the appellant by alleging that the facts of these cases are not identical to the given case. On the other hand, it has itself relied on the decisions the facts of which are not identical to the appellant's case. Such an approach is not justified.

The impugned order has placed reliance on the decision given by the Hon’ble Supreme Court in the case of M/s Mehta & Co. [2011 (264) ELT 481 (SC)] in which it was held that the period of five years was to be calculated from the date of information to the department. In other words, this decision stated the manner in which calculation of five years will be done; there was no dispute that the extended period can be invoked. Further, in this case, this was clear cut case of suppression and the department had come to know about the manufacture of furniture from the information provided by the buyer. This decision is not applicable in the instant case. In this case, the appellant has not suppressed any information from the department and have also filed their periodical returns regularly. Therefore, in the case of appellant, this decision is not applicable at all and the demand is barred by the clause of limitation. Therefore, the impugned order has wrongly placed reliance on this decision and is liable to be quashed.

It is submitted that the impugned order has relied upon the decision given in the case of Mathania Fabrics Vs CCE, Jaipur [2008 (221) ELT 481 (SC)] and Salasar Dyg & Ptg. Mills (P) Ltd., Vs CCE, Surat [2009 (235) ELT 93 (Tri-Ahmd.)]. In this regard, it is submitted that these decisions were passed for deciding the manner of computation of extended period of limitation. In this regard, it is submitted that this is not the case here. The manner of computation of extended period is not contested. Therefore, these decisions are not applicable in the instant case. As such, the reliance placed on these two decisions is not sustainable and is liable to be quashed.

The impugned order has further relied upon the decision of COMMISSIONER OF CENTRAL EXCISE, AHMEDABAD-I VERSUS M. SQUARE CHEMICALS [2008 (231) E.L.T. 194 (S.C.)]. The impugned order has wrongly placed reliance on this decision as it is passed against the department and this involves the manner of computation of extended period. Similarly, in the case of Nazareth Metal Vs Commissioner of C.Ex., Mumbai-II [2006 (205) ELT 998 (Tri. Mumbai)] also, the decision was given against the department and it was held in this case that the extended period is not invokable. Relying on the decisions which are passed against the department and in favour of assessees shows how casually the impugned order has been passed. Such an order is not sustainable and is liable to be quashed.

It is further submitted that the impugned order has further relied on the decision of Associated Cement Companies Ltd., Vs CC [2001 (128) ELT 21 (SC)]. In this decision the issue was lower valuation of imported goods. The facts narrated in the order showed that the value of goods so imported was declared at very low price which is clearly a case of misstatement which attracts the extended period of limitation. In the instant case, there was no misstatement or suppression of facts and rather it is case of availment of cenvat credit on various input services and the view was also backed by number of decisions given by various tribunals. Accordingly, the provision of extended period of limitation is not invokable and the impugned order deserves to be set aside.

The impugned order has further relied on the decision given in the case of Century Tiles Ltd. V/s Commissioner of Central Excise, Ahmedabad [2009 (236) ELT 583 (Tri.-Ahmd)]. In this decision, the transaction details were not submitted to the department. Therefore, the extended period was invoked. Further, this decision was distinguished in COMMISSIONER OF C. EX., AURANGABAD VERSUS YESHWANT INDUSTRIES [2014 (313) E.L.T. 667 (TRI. - MUMBAI)]. The appellant reiterates that since there was no malafide intention and no suppression of facts in the present case, the reliance placed on the above decision is not sustainable and is liable to be quashed.

The impugned order has further relied upon the decision given in the case of Chemfab Alkalis Ltd. vs CCE Pondicherry [2010 (251) ELT 264 (Tri.-Chennai)]. In this decision, the extended period was invoked as the details of exempted products were not submitted to the department. This is not the case here as the appellant has not suppressed any information that was legally required to be furnished under law. As such, this decision cannot be applied in the given case.

The impugned order has further relied on the decision given in the case ofCCE., Surat-I vs Neminath Fabrics Pvt. Ltd. [2010 (256) ELT 369 (Guj.)]. In this case, the extended period was held as invokable as the ingredients of the proviso are satisfied. In the instant case, the impugned order has failed to prove which of the ingredients mentioned in the proviso is satisfied. Since it is not proven, the requirements imposed by the section are not satisfied. Therefore, the ingredients of above section are not satisfied and impugned order has wrongly placed the reliance on the above mentioned decision.

The impugned order has confirmed the imposition of penalty by holding that since the appellant is liable to pay the service tax alongwith interest; the penalty is also payable. It is worthwhile to mention here that no penalty can be imposed under Section 78 of the Finance Act, 1994 if there was no willful suppression or intention to evade payment of service tax on the part of the assessee. The impugned order has not been able to clearly establish that any of these elements were in existence in their case. On the other hand, they have proved their bonafides as categorically discussed here above. It is submitted that when no such element was there, the penalty under Section 78 of the Act is not required to be imposed on the appellant. It has been held in the case of HINDUSTAN STEEL V. STATE OF ORISSA [1978 2 ELT J 159 (SUPREME COURT)] that an order imposing penalty for failure to meet statutory obligation is a result of proceedings which are quasi judicial in nature and penalty should not ordinarily be imposed unless the person acted deliberately in defiance of law or was guilty of misconduct or dishonest or acted in conscious disregard of his obligation. It is further held in the case of ORIENT CERAMICS AND INDUSTRIES [1987 (32) ELT 218 (I)] that words ‘with intent to evade payment of duty’ are very significant and unless and until the intention to evade payment of tax is proved on part of assessee, no penalty can be imposed. Similar view has been taken by hon’ble High Court in the following case:-

Commissioner of Central Excise v/s ESS ESS Engineers [2011 (23) S.T.R. 3 (P & H)]:-

“The High Court observed that the Tribunal had held that short payment was mainly due to the appellant’s understanding that they were not liable to pay service tax on fabrication and dismantling charges. As regards penalty under Section 78 is concerned, the same is imposable in a case where service tax has not been levied or paid or has been short levied or short paid or erroneously refunded, by reason of fraud; or collusion; or willful misstatement; or suppression of facts; or contravention of any of the provisions of this Chapter or of the rule made thereunder with intent to evade payment of service tax. It was noted that the fact of non-payment of service tax was discovered during the course of audit.

The High Court held that the submission of Revenue that appellant was guilty of mis-declaration was not acceptable as the Tribunal had given a finding of fact that assessee did not have requisite mens rea to evade payment of service tax. The assessee had duly paid the service tax with interest and also made full and true disclosure in the return. The finding of fact of Tribunal was not shown to be perverse in any manner. Hence no question of law arises.”
Thus, mens rea is an essence of invoking the penal provisions. Reliance is also placed on the following judgments:-

2010 (258) ELT 465 (SC) – Sanjiv Fabrics
2007 (207) ELT 27 (P &H) – UT Ltd
2007 (5) STR 251 (P & H) – Kamal Kapoor
2009 (238) ELT 3 (SC) – Rajasthan Spinning & Weaving Mills
2009 (238) ELT 209 (P&H) – J. R. Fabrics
2009 (238) ELT 226 (Mad) – Thirumala Alloys Castings
2008 (228) ELT 31 (Del) – K. P. Pouches

In view of these judgments, no penalty can be imposed unless mens rea or intention to evade payment of duty/service tax is proved. Also, the impugned order has not otherwise proved the malafide intention; therefore, in view of these judgments the impugned order is liable to be quashed.

Aligning with the above, it is submitted that the issue involved herein is that of interpretation of legal provisions and where interpretation of legal provisions is involved penalty cannot be imposed on the assessee. This contention has been upheld in the case of Uniflex Cables Ltd v/s Commissioner of Central Excise, Surat-II [2011-TIOL-85-SC-CX] wherein it was held as under:

Central Excise – No penalty in a case of interpretational nature: The Commissioner, himself in his order-in-original has stated that the issue involved in the case is of interpretational nature, Keeping in mind the said factor, the Commissioner thought it fit not to impose harsh penalty and a penalty of an amount of Rs. 5 lakhs was imposed on the appellant while confirming the demand of the duty. Therefore, in the facts and circumstances of the present case, penalty should not have been imposed upon the appellant.

Thus, hon’ble Supreme Court has held that penalty is not imposable in the issues involving the interpretation of legal provisions. In the instant case also, the credit availment pertains to interpretation of the definition of input service. As such, the impugned order in original imposing harsh penalty under Rule 15(3) of the Cenvat Credit Rules, 2004 is not at all sustainable and should be set aside.

In continuation to the above, the appellant further submit that even the highest court of India – Hon’ble Supreme Court has held in the case of COMMISSIONER OF CENTRAL EXCISE, TRICHY VERSUS GRASIM INDUSTRIES LTD. [2005 (183) E.L.T. 123 (S.C.)] that where the act of assessee is based on the interpretation taken by the Tribunal, penalty cannot be imposed as the act is based on bonafide belief. The verdicts of Apex Court are produced as follows:-

“Penalty - Bona fide belief caused by Tribunal’s decision - Tribunal in a number of cases giving an interpretation as understood by assessee - Penalty not imposable - Rule 173Q of erstwhile Central Excise Rules, 1944 - Rule 25 of Central Excise Rules, 2002. [para 20]”

In the present case, the act of availment of credit of service tax is backed by number of decisions given by Tribunal. The analysis of above decision makes it clear that since the appellant have acted under bonafide, no penalty can be imposed on them. Therefore, the benefit of above decision of Hon’ble Supreme Court should be extended to the appellant and the order in original should be set aside.

Aligning with above, it is submitted that the appellant had submitted the above referred decisions in the reply to show cause notice submitted by them. But, while passing the impugned order, these decisions have simply been brushed aside. None of them were discussed and distinguished while passing the impugned order. This has made the impugned order as non reasoned and non speaking order which is not sustainable in view of Supreme Court decisions given in the case of STATE OF HIMACHAL PRADESH VS SARDARA SINGH [2008-TIOL-160-SC-NDPS]as already discussed in the forgoing paras. In this regard, the impugned order has relied on the decisions given in the case of GOODYEAR INDIA LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, NEW DELHI [2002 (149) E.L.T. 618 (TRI. - DEL.)]. In this regard, it is worthwhile to mention here that this decision is not applicable in the instant case as it is pronounced by Tribunal which is not binding precedents in view of hon'ble Supreme Court decisions cited by the appellant in their reply to show cause notice. Therefore, the impugned order is not tenable in not discussing the Supreme Court decisions cited by them and in turn citing the judgment of lower appellate authority.

Respondent’s Contention and Reasoning: - In the Commissioner Appeals, it was held that the appellant would be eligible for taking Service tax credit on travelling expenses occurred in relation to their business. However, regarding eligibility of Service tax credit on hotel room expenses, the authority found that since the appellant is required to travel a lot for gathering information regarding products launched in the market, the accommodation services are also important input service for provision of taxable output service. Thereby, the appellant is eligible to avail Cenvat Credit of service tax paid by them on Accommodation Services. Although the Service tax Credit on Food bills shall be paid along with interest and penalty.
Conclusion: - Appeal Allowed.
Comment:- A provider of taxable services can, in terms of rule 4 of the Cenvat Credit Rules, 2004 avail credit of excise duty paid on inputs and capital goods and service tax paid on any input service. The credit can be utilized towards payment of service tax subject to the fulfillment of certain conditions.Many traders use the same inputs for both business & personal. A taxpayer is not allowed to claim any input credit for Service Tax paid on personal expenses. The gist of the case is that availment of input tax credit on food bills would not be allowed. However credit would be admissible in case of mobile phone bills, travelling expenses and expenses relating to accommodation in hotel rooms.

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25 January 2019

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PJ/Case Study/2018-19/144
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