Your second question itself is answer to your first question.
Currently, there are three pools of Input Service Credit available to the Company: a. Input services which are directly related to provision of exempt service b. Input service exclusively related to taxable service c. Input service common for taxable/exempted service The Company is availing CENVAT Credit only on those input services which have been exclusively used in the provision of taxable service. No CENVAT Credit is being availed on input services which are directly related to provision of exempted services. Further, the Company is also not availing CENVAT credit on common input services which are used for provision of both taxable and exempted service. Query: (i) Whether, in the determination of the attributable CENVAT credit for exempted services and taxable services under Rule 6(3A) of CCR, the value would include only the value of common inputs and common services used in the rendering of exempted services or the value of goods and services that were exclusively used in the provision of taxable services is also to be taken into account? (ii) If the answer to Sr. No (i) above is in negative, then whether the Company is eligible to avail CENVAT Credit on common input services as per the methodology provided in Rule 6(3) in addition to the CENVAT Credit on input services used exclusively for provision of taxable service?
Thanks but can you please elaborate. Denominator given in formula as per Rule 6(3A) specifically provides for total input service and not common input service. While the intention may be to exclude input services which are directly related with taxable output service but the formula results in an absurd situation. Please clarify?