Companies to contest notices for reversal of input tax credit

According to Cenvat rules, companies have to reverse input tax credit on exempted turnover arising out of their non-core businesses

Some of the companies which have received notices to reverse input tax credit in service tax are planning to challenge the revenue department's stand at the commissioner level on the ground that they should not be served these notices since they have not given any services by investing in securities and mutual funds.  

The notice, if upheld, could have repercussions for the goods and services tax (GST) regime as well as similar provisions exist in the new indirect tax regime as well. 

The companies have not been trading in stocks but investing in stocks and as such not providing any services,