Is input credit available for claim if output is exempt.

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

18 October 2016 my client is a construction company.providing construct service to central govt for residential building for army, which is exempt.But it has some sub contractor which provides contract service, manpower supply service (RC),and other consulting services and charging service tax on their bill.Now my client is paying those tax and is it eligible to claim those service tax???? please reply

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

18 October 2016 No cenvat credit can be claimed but sub contractor is also exempted from service tax when main contractor is doing exempted work.

Querist : Anonymous

Querist : Anonymous (Querist)

19 October 2016 Thank You seetharaman ji, but if the nature of subcontractor is different .that means if we are getting security service or manpower service from a contractor ,which came under reverse charge and we pay tax then???and if the subcontractor is charging tax in the bill and we are paying the same ,then what to do??

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

19 October 2016 Claim refund of service tax which is paid under reverse charge as per notification 28/2012 and Rule 5B of cenvat credit rules.

Querist : Anonymous

Querist : Anonymous (Querist)

22 October 2016 but which are directly paid to parties canot be claimed???

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

22 October 2016 Yes it can't be claimed.

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