Input service as per Cenvat Credit Rules, 2004, is an expansive definition

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: We are a dealer based in Haryana engaged in trading of various household products. As the electricity supply in our area of operations is not very good, we are largely dependent on generators and accordingly, purchase diesel in huge quantity. As the diesel purchased is utilised in the course of operations, we assume that we can avail credit of the same. Please clarify.

Schedule E of the Haryana Value Added Tax, 2003 pertains to list of goods on which input tax credit cannot be availed. Petroleum products when used as ‘fuel’ are covered in the aforesaid schedule. Therefore, input tax credit on diesel, purchased to be used as fuel, cannot be availed.

We are a multinational company dealing in accessories and have recently set up a subsidiary in India. In order to display our products and penetrate the Indian market we wish to participate in certain exhibitions and for that purpose have entered into a cost sharing agreement with another Indian company to share exhibition related costs. For administrative purposes, we will initially pay for all the expenses pertaining to the exhibition and later on the other company will reimburse us the share of the expenses attributable to them. Please clarify whether such an arrangement will attract Service tax liability.

In order to levy Service tax, there should be an element of service and also a service provider-service recipient relationship. In the present case, the arrangement between the two companies seems only to be a cost sharing agreement, wherein one company will initially bear the expenses and the other will reimburse it later. There is no provision of service by one company to the other and therefore there is no service provider—service receiver relationship. Thus, such an arrangement would not be leviable to Service tax.

We are a company dealing in chemicals with the manufacturing facility at the plant situated in a countryside area. We have canteen facility at the factory premises and have entered into an agreement with a contactor to provide the catering services. The contractor charges Service tax at the time of billing for the services provided. In this context, please advice whether credit of Service tax paid on cafeteria services is available.