service tax credit

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PANKAJ MISHRA (Querist)
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27 March 2009 In our Pvt. Ltd. company we have taken service tax registraton mentioning two services
1. Renting of immovable properties
2. Maintenance or repair service
Our company is a real estate company and our main business is construc building and sale the same.
One construction contractor charged service tax on labour charges of our new project and bill to our company.
Now we wish to get credit of service tax on contracotrs bill against service tax payable by us on rent and maintencance bill service tax.
But our CA refused that you cant't adjust because you are not having regn. under head contracotr/construction business in Service tax regn. certificate and this contracotrs services are not input for rent and maintenance services rendered by us.
Is our CA is correct.
Please advise if correct please guide how we can get credit of this amount because this amount is very high.

Sanjay Soni

Sanjay Soni (Expert)
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28 March 2009 Sorry but you can not take credit for the service tax paid to the contractor.

as as per service tax rules credit is available for the tax paid for the service utilised/used in providing the service to the end user

Here you are using service of Contractor but the same service is not being used for the purpose of providing directly the service of Renting.

Therefore even you have the regn under Contractor head in Service tax you can not take credit of this against rent

PANKAJ MISHRA

PANKAJ MISHRA (Querist)
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28 March 2009 Thanks.
Can you mention conerned rule number.

CA PRAMOD SARAOGI

CA PRAMOD SARAOGI (Expert)
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01 April 2009 There is a circular issued by the CBEC in thi regard that Service Tax payable under the category renting of immovable Property cannot be set off or adjusted with the cenvat credit on the construction activities.

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