Restaurant Service & CENVAT credit - a dissertation

Rule 2(e) of the CENVAT Credit rules, 2004, which explains a exempted service for denying/ applicability credit credit.

The service tax is charged only on part of service provided not on cost of goods (Bundled Service and goods cost), and hence abatement on total cost of bundled costing was provided, to arrive at valuation of service charges.


For restaurant service, only input goods cost are exempted and not services part, therefore, Input credit from Chapter 1 to 22 is applicable as credit. The other credit are for Services, and hence applicable.

Thereby rule 6 is not applicable in the instant case of Restaurant Service.

If same principles are applied then all services availing abatement are to be covered. Not only Services, manufacturing units exporting goods can also be covered into the litigations

what about manufacturing and service providing units availing some exemption services or the other

brijeshsharma brijeshsharma 16/07/2015