Composite MaharashtraVAT and ST charged on Inter State Purch

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This query is : Resolved

Aman Baranwal (Querist)

31 March 2009 I am a Manufacturer (other than maharashtra), get repaired a machinery with Material from Maharashtra. Vendor Charged me Composite Maharashtra Vat @ 8% and Comopsite Service Tax @ 2% on a Invoice prepared in 2007-08.

Can I take CENVAT Credit on service tax Paid on Repair Charges and if yes, state what is the Percentage of CENVAT Credit is to be taken?

And, in future Can CST @2% is leviable in place of Maharashtra VAT because i cannot take Credit of VAT due to Inter State Purchase.

Please Reply fast...

Dayal

Dayal (Expert)

31 March 2009 Inter state VAT / CST is non vatable, and is a cost of the transaction.

Regarding credit of service tax,Service Tax Charged under works contract composition scheme i.e. @ 4.12% by the service provider is availble as cenvat credit to Service Receiver of that service or Not?

As per my opinion the same is not cenvatable reason being that:

As per rule 3(1)(ix) of Cenvat Credit Rules 2004, cenvat credit is available only of the service tax leviable under section 66 of the Finance Act. Charging of service tax under composition scheme is not covered under section 66 of Finance act.

Charging of Service tax under composition scheme is stipulated in Rule 3(1) of “Works Contract (Composition Scheme for payment of Service tax) Rules, 2007” and the same has not been made available for cenvat credit as per Cenvat Credit Rule 2004.

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