Construction of residential complex and abatement

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

30 December 2009 If a service provider engaged in Construction of residential complex service was availing benefit of abatement of NT 1/2006 i.e 67% from say 1.4.2009 to 30.9.09, and therefore did not avail CENVAT Credit. Now the service provider wishes to forego this abatement w.e.f 1.10.2009 and start paying service tax on entire taxable value @10.3%. The question is "will he be entitled to claim CENVAT Credit on inputs, capital goods and input services purchased/used by him on and after 1.10.2009". He is not intended to claim credit for prior period. What will be the tax implications in such a case.

Madhukar N Hiregange

Madhukar N Hiregange (Expert)
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01 January 2010 I am not able to understand why he wishes to do so. The liability for residential complex services is itslef in doubt.
Anyway if he chooses for the subsequent contracts to avail the credit and pay ST on gross amount he would be eligible to do so. The stocks in hand on which CED paid also wouldbe available as credit for him.
However pl confirm the commercial aspect of the transaction as in my view it may not work out.

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