Opinion for CENVAT CREDIT Holiday Inn Manali.

Terms of Reference a.) Can we take CENVAT Credit in Hotels & Resorts in case Royalty paid to overseas concerns. b.) Payment of Service tax in case of Travel Desk Rent c.) Input of Service Tax in other services used to provide output service.

Input Service Rule 2(I) of CCR 2004 The Definition of Input Services is amended with effect from 01-07-2012 vide notification no 28/2012 CE (N.T) dated 20-06-2012 which read as under Input service means any service i) ii) Used by provider of output service for providing an output service, or, Used by a manufacturer, whether directly or indirectly, in or in relation to manufacture of final products and clearance of final products up to the place of removal and includes services used in relation to modernization, renovation, repairs of a factory, premises of provider of output service or an office relating to such factory or premises, advertisement or sales promotion, market research, storage upto the place of removal, procurement of inputs, accounting, auditing, financing recruitment, and quality control, coaching, and training, computer networking, credit rating, share registry, security, business exhibition, legal services, inward transportation of inputs or capital goods and outward transportation upto the place of removal, but excludes A) Services portion in the execution of a works contract and construction services including services listed under clause (b) of section 66E of the Finance Act (herein after referred as specified services) 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, b.) Laying of foundation or making of structures for support of capital goods. Except for the provision of one or more of the specified services, or B.) Services provided by way of renting of motor vehicle in so far as they relate to a motor vehicle which is not a capital goods, or, BA.) Service of General Insurance business, servicing, repair and maintenance, in so far as they relate to a motor vehicle which is not a capital goods, except when used bya.) 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.

C.) such as those provided in relation to outdoor catering, beauty treatment, health services, cosmetic and plastic surgery, membership of a club, health and fitness centre, Life insurance, health insurance and travel benefits extended to employees on vacation such as leave and Home Travel Concessions, when such services are used primarily for personal use or consumption of any employee.

Royalty as a input service as royalty is paid for the Brand Name of Holiday Inn and all the payments are made to provide output service and is integrally connected with the business hence qualify as input service. CENVAT Credit conditions in case of hotels

Research and Development Cess :- Eligible for exemption on R&D cess paid (Notification no 14/2012 ST) on the taxable service involving import of technology, so much of the service tax is leviable thereon under section 66B of the said Act, as is equivalent to the amount of cess payable on the said import of technology under the provisions of section 3 of the Research and Development Cess Act 1986, subject to the following conditions a.) The said amount of Research and Development Cess is paid within 6 months from the date of invoice or in- case of associated enterprise, the date of credit in the books of account. However, the exemption shall be available only if research and Development cess is paid at time before payment or before the payment of service b.)