Does the same ratio apply to service providers also?
Yes. If a service provider is engaged in providing both taxable and non taxable (or exempted) services, he can maintain separate accounts and take credit only on those inputs/input services which are used in taxable services. Or alternatively if separate accounts are not maintained, he is allowed to use only 20% of the credit for payment of service tax on taxable service. In other words, if the tax liability is Rs 100, only Rs. 20 can be paid from the Cenvat Credit account and the remaining Rs 80 has to be paid in cash.
