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Cenvat credit in case of service under composition scheme

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This query is : Resolved

hardesh tolani (Querist)

11 January 2013 Under Composition Scheme can a Service Receiver who has taken services from Service Provider who has opted for Composition Scheme take credit of service tax paid to service Provider.

Kaushik Vinod

Kaushik Vinod (Expert)

11 January 2013 Dear Hardesh,

Yes the Service Recipient can avail the credit of tax only to that extent.
For your reference I am giving the the extract of Rule 3(2A)of Works Contract ( Composition Scheme) Rules,2007
2a[(2A) The CENVAT credit of tax paid on taxable services as referred to under sub-clauses (zzd), (zzq) and (zzzh) of clause (105) of section 65 of the Finance Act, 1994, shall be available only to the extent of 40% of the service tax paid when such tax has been paid on the full value of the service after availing CENVAT credit on inputs.]

Thanks

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