Recently, in the case of M/s IP Rings Ltd v. CESTAT Chennai & Anr, the division bench of the Madras High Court has held that the assessee is entitled to Service Tax Credit on catering services.
Earlier, the Revenue noted that credit is not available to such services since the same is not used in or in relation to the manufacture of the finished excisable goods in its factory. Aggrieved by the order, the assessee preferred appeals before the appellate authorities who rejected their claim.
The division bench comprising of Justice Huluvadi G. Ramesh and Justice Anita Sumant noted that issue has been decided in favour of the assessee by two decisions of this Court in The Commissioner of Central Excisev. M/s. Borg Warner Morse Tec Murugappa Pvt Ltd [2015 TIOL 831HC MAD CX] and The Commissioner of Central Excise v. M/s.Visteon Power train Control Systems (P) Ltd. [2015 TIOL 580 HCMAD CX].
Allowing the appeal, the bench added that “accordingly, the questions are answered in favour of the assessee and against the revenue. The appeal stands allowed. It is made clear that the cost of food borne by the worker should not be taken into consideration for the purpose of grant of credit of Service Tax.”
Read the full text of the Judgment below.