Cenvat

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

29 September 2016 Ø The assessee has constructed a hotel and has given it on rent.
Ø The assessee receives rental income every month and collects service tax on it.
Ø During the construction of hotel he had purchased various construction materials directly from the manufacturers and had paid excise duty on it.
Ø Service tax was also paid on various services availed during construction period, like transportation, warehouse charges, interior designer etc.
Ø The furniture was imported and various import duties were paid on it.
Ø The construction was completed in FY 2009-10 and for few months the hotel was operated by the assessee himself and later in FY 2010-11 it was leased to the tenant.
Ø From April 2010 to December 2012 the entire service tax liability was paid under VCES scheme, entire liability was paid in cash without utilizing any credit.
Ø Whether we can take credit of excise duty paid on construction materials and the various import duties paid on furniture to discharge our service tax liability from January 2013 onwards.
Ø We have not filed any ST 3 return till date. Should we file any ST 3 return prior to VCES scheme in order to take the credit of excise duties and import duties or it is sufficient if we file ST 3 return for Jan 13 to Mar 13 showing the entire CENVAT credit as opening balance.
Ø Further for few imported furniture we do not have invoices, so can we take credit on such items based on our accounting records in the absence of invoice.
Ø In case for few assets we had capitalized the duties to the respective assets in the year of construction, can we reverse the duties by reducing the value of asset and now claim the credit.
Ø What are the consequences if we take the credit and then it is proved that the credit is wrongly taken.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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29 September 2016 No cenvat credit can be taken on materials and services used for construction. See cenvat credit Rules.
Invoice is required for claiming cenvat credit. The time limit for claiming cenvat credit is one year.
So no cenvat credit can be claimed by you.
Interest and penalty will be levied on wrongly taken cenvat credit.

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