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Definition of Input Service in Cenvat Credit Rules, 2004

Definition of Input Service in Cenvat Credit Rules, 2004

Rule 2(l) of the Cenvat Credit Rules, 2004 defines Input Service.

ServiceUsed byUsed
Any ServiceProvider of output serviceFor providing an output service
Any ServiceThe manufacturerWhether directly or indirectly, in or in relation to the manufacture of final products and clearance of final products up to the place of removal.

Inclusions in Input Service

Input service includes following services used in relation to –

  1. Modernization, renovation or repairs of a factory, premises of provider of output service or an office relating to such office or premises.
  2. Advertisement or sales promotion, market research,
  3. Storage upto the place of removal, procurement of inputs
  4. Accounting, auditing, financing, recruitment and quality control.
  5. Coaching and training, computer networking
  6. Credit rating, share registry, security, business exhibition, legal services
  7. Inward transportation of inputs or capital goods and outward transportation upto the place of removal

Exclusions from Input Service

(A) Services portion in the execution of a works contract and construction services including service listed under clause (b) of section 66E of the Finance Act in so far as they are used for –

(a)  construction or execution of works contract 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,

However, the above services are eligible as input services for providing one or more of the above specified services.

(B) Services provided by way of renting of a motor vehicle, in so far as they relate to a motor vehicle which is not a capital goods; or

(C)  General Insurance Services, servicing, repair and maintenance , in so far as they relate to a motor vehicle which is not a capital goods,  except when used by –

(a) a manufacturer of a motor vehicle in respect of  a motor vehicle manufactured by  such person ; or

(b) an insurance company in respect of a motor vehicle insured or reinsured by such person; or

(C) Service such as those provided in relation to

(a) outdoor catering,

(b) beauty treatment, health services, cosmetic and plastic surgery,

(c) membership of a club, health and fitness centre,

(d) life insurance, health insurance

(e) 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.

Definition of Input Service in Cenvat Credit Rules, 2004

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