Practice being adopted by leading Hotel Chains to utilize Cenvat Credit beyond permissible limits – reg.
F.No.V/DGST/30-MISC-45/2009/756 Dated:- 8-2-2011 Circular
Service Tax
F.No.V/DGST/30-MISC-45/2009/756
DIRECTORATE GENERAL OF SERVICE TAX
9 th Floor, Piramal Chambers, Jijibhoy Lane, Parel, Lalbaug,
Mumbai 400 012
Ph. No.24178515, 24102587
Dated: February 8, 2011
Sub: Practice being adopted by leading Hotel Chains to utilize Cenvat Credit beyond permissible limits – reg.
Please refer to this office letter of even number dated 27.04.09 whereunder copy of letter Dy. No.62/Comm. (ST)/2009 dated 27.03.2009 from the Commissioner (Service Tax), CBEC, New Delhi along with its enclosures, was forwarded to you for taking appropriate action and calling for the action taken report.
In the said letter dated 27.03.2009, the Commissioner Service Tax, had informed this office about irregular availment of Cenvat Credit by leading hotel chains, as reported to him by the Chief Com
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
of the formations which have sent the reports have conveyed that they have found similar issue prevailing in their jurisdiction and that they are taking the necessary action to protect the revenue. On perusal of these reports, it has been observed that the service provider, in most of the cases, is M/s Indian Hotel Corporation Ltd. (M/s IHCL), an assessee registered with Service Tax-I Commissionerate, Mumbai. However, there are others as well viz. M/s Apeejay Sunder Corp. Services, Kolkata, M/s Sarovar Hotels Pvt. Ltd., Mumbai, M/s Nirulas Comer House P. Ltd. etc. who also provide similar services to hotel chains and enable the service recipient to take full Cenvat credit by treating the services as 'Business Consultancy Services'. The field formations are of a uniform view that the services provided by M/s IHCL and other such service providers to the owners of hotels can not be considered to be 'Management Consultant Services' but such services are actually in the nature of Business S
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
ation of their services, the issue would cease to exist. Even other similar service providers would follow suit. Till then, action is required to be taken by the field formations to prevent / recover the inadmissible excess Cenvat Credit availed by the recipient of such services.
It may not be out of place to mention here that the Commissioner, Chandigarh-I, who had originally taken up the issue, had, in the meantime, dropped the demand notice issued in this respect to M/s Taj GVK Hotels and Resorts (service recipient) by passing an Order-in-Original dt.20.09.2010 by holding, inter-alia, that 'the cause which has initiated the present proceedings was beyond the control of the noticee; the noticee can not be held responsible for the misclassification of taxable service at the bands of provider of such service; so the demand is not sustainable and it is even hit by time bar also apart from being not sustainable on merits' etc. However, it has now been reported by the Chief Commissioner'
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =