CENVAT Credit

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This query is : Resolved

CA Priya (Querist)

24 August 2010 Sir/madam,

I have come across a strange situation. In one of my client office they construct telecommunication tower... They charge ST in their invoice raised to their customers......... They procure materials on their own and construct tower..... They charge ST @ 4% plus Cess.... But they dont take input credit on certain services like Rent a cab etc.......... They say that they cant take credit......I think they can take credit......... As per CENVAT rules all services in relation to output service is eligible na... So In relation to is broad and wide enough to take credit na........ Pls clarify.....

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)

24 August 2010 In my understanding, your client is paying service tax under Works contract service composition scheme,The Works contracts under compostion scheme CENVAT can be availed only for Input Services and capital goods, ask them to refer the following 2 circulars

1.Circular No.96/7/2007 -ST dt:23.8.2007

2. Circular No.B1/16/2007-TRU DT:22.5.2007

Aditya Maheshwari

Aditya Maheshwari (Expert)

25 August 2010 you can get complete details of the above here if you are paying ST as Works Contract (Composition Scheme for Payment of Service Tax)
https://servicetax.gov.in/workcontract-rules.htm

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