Sir,
We are Interior contractors and traders.
We buy excisable goods from the manufacturer and sell the goods to our clients and in some cases, we also provide taxable services, where in we charge service tax on the service portion.
My Query,
In the above case, whether cenvat credit on purchase of input can be claimed/adjusted against our output service tax payable.
Pl clarify.
If the activity performed by you is a “Works Contract” then, you cannot claim CENVAT Credit on inputs, else you may. [Explanation 2 to Rule 2A of the Service Tax (Determination of Value) Rules, 2006]
You can utilise the CCR of input, but CCR relating to inputs which has been used for providing taxable service can only be utilised. CCR relating to inputs which has been sold has to be reversed U/S 6(3) of CCR, 2004in case of common input.
My reply is in sync with Mr. Giri.
Sri Aurobindo Gnostic Centre of Education
New Delhi
CA
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O P Bagla & Co LLP
New Delhi
CA Inter
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Rahul Dang & Associates-Chartered Accountants
Pune
CA Inter
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