9. Service tax credit

9.1
IPR holder avails many input services in the course of providing intellectual property 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. IPR holder has to bear the incident if service tax charged on these input services.

9.2
The Cenvat Credit Rules, 2004 provides that intellectual property services provider can take credit of the service tax paid on input services and setoff the same on payment of service tax on output service namely intellectual property services

9.3
in case IPR holder is providing services other than intellectual property services which are not taxed and separate accounts are not maintained for taxable service and exempted service, then he can avail Cenvat credit only up to 20% of his tax liability.

9.4
Similarly, a manufacturer or a service provider can take credit of the service tax paid on intellectual property services and adjust same against his excise duty/ service tax liability.