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For manufacturing any good (or) for providing any service, it requires inputs (Raw materials), capital goods (machineries), input services (consultancy, etc.,) The excise duty paid on Inputs and capital goods and service tax paid on input services is availed (i.e. taken) as credit, which can be utilised (i.e. Setoff) for payment of Excise duty on finished goods and Service tax on output services. Inputs Immediately on receipt of inputs into factory of manufacturer or any premises by service provider 100% of duties paid available as credit on the basis of invoice Input Services Immediately on receipt of invoice, even if payment is not made by service recipient1 100% of service tax mentioned in the invoice Capital Goods Immediately on receipt of inputs into factory of manufacturer or any premises by service provider Upto 50% in the first financial year of purchase and balance in the subsequent years