27 December 2011
we r doing manufacturing (Steel tanks,vessels)as well as erection and installations.For manufacturing activities we raise supply invoice with exice duty, vat etc.For erection activities we raise labour invoice with service tax on gross value.We also buy consumables such as electrodes,gases for our erection work which is generaly caried out at various places in india.Hither to We utilised the cenvat credit out of this purchase(site consumables) in our supply excise return which was objected by department.Kindly clarify, in such case can we utilise the cenvat credit of these consumable items in service tax payments due to our erection operations.it also be clarified can we take vat credit of these site consumable items against our supply vat return.
29 December 2011
1. when such consumables are not brought into the factory of production, input credit not available under Excise.
2. under service tax, same pattern will follow, however if your invoices are made in name and address of factory where from the services are provided, then input credit may be allowed.
3. you can take vat credit within the state only, out of state no credit is allowed.
to avoid litigations, inform your Deputy commissioner service tax the process adopted by youself and add each project site at your centralized service tax registration, which will allow you to take input credit of consumables purchased and used at site.
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