12. Service tax credit

12.1
Consulting engineers avails many input services in the course of providing consulting services to their client. A few examples are Advertising Services, Banking and Other Financial Services, Business Support Services, Chartered Accountants Services, Courier Services, Facsimile Services, Telephone Services and a lot other services which are taxed. The Consulting engineers has to bear the incident if service tax charged on these input services.

The Cenvat Credit Rules, 2004 provides that Consulting engineers can take credit of the service tax paid on input services and setoff the same on payment of service tax on output service namely Consulting Engineers Service

12.2
in case Consulting engineers is providing services other than Consulting engineers which are not taxed and seperate accounts are not maintained for taxable service and exempted service, then he can avail Cenvat credit only up to 20% of his tax liability.

12.3
Similarly, a manufacturer or a service provider can take credit of the service tax paid on Consulting engineers services and adjust same against his excise duty/ service tax liability.