CBIC vide Circular No. 213/3/2019-Service Tax July 5, 2019, has clarified that no requirement of reversal of Credit under Rule 6(3) of the Cenvat Credit Rules 2004 (“CCR”) by service providers of catering and restaurant services or providing any services on which abatement has been prescribed vide Notification No. 26/2012 – ST dated June 20, 2012 (“Notification”).
It was further clarified that all services mentioned in said Notification does not ipso facto become “exempted services” and that they will become so only if they satisfy the twin conditions specified in section 2(e) of CCR i.e. there is a restriction on both inputs and input services.
Complete Circular can be accessed at: http://www.a2ztaxcorp.com/wp-content/uploads/2019/07/reversal-of-credit-is-not-required-under-service-tax-by-service-providers-of-catering-and-restaurant-services.pdf