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The Supreme Court said that telecom companies can avail CENVAT credit for payment of service tax on services provided by them. The CENVAT credit rules of 2004 deal with the exemptions available to manufacturers. The court said in the judgment that mobile service providers also come under CENVAT credit rules.
New Delhi. In a relief to mobile service providers, the Supreme Court said telecom companies can avail CENVAT credit for payment of service tax on services provided by them. The CENVAT credit rules of 2004 deal with the exemptions available to manufacturers. This exemption is available when manufacturers use certain specific materials after paying excise duty for manufacturing their products.
In a significant judgment, the Court said that mobile service providers are also covered under CENVAT credit rules as they are engaged in manufacturing of various items… especially peripherals such as mobile towers and pre-fabricated buildings (PFBs) to set up their business. But pay excise duty. A bench of Justices BV Nagarathna and N Kotishwar Singh settled the decade-old dispute, which arose following a 2014 Bombay High Court order.
It said that mobile service providers (MSPs) are not entitled to claim CENVAT credit on mobile towers and pre-fabricated buildings. However, in 2018 the Delhi High Court held that towers and other associated structures like PFBs fall under the rubric of 'capital goods' and are 'inputs' as defined under CENVAT rules and hence, the MSP paid for installation of mobile towers and PFBs. Entitled to input credit on excise duty paid.
Disclaimer: Prabhasakshi has not edited this news. This news has been published from PTI-language feed.
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