Service Tax credit

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pardeepgarg2000

pardeepgarg2000 (Querist)
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10 December 2010 We are installing a new manufacturing plant. The land has been taken & civil work is going on. We have yet to take excise & service tax no.

Can we take service tax credit on different payments made to consultants etc & accumulate it & utilize for payment of excise duty after start of commercial production.

CA Shailesh Kumar Bhagat

CA Shailesh Kumar Bhagat (Expert)
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11 December 2010 Are you taking these expenditure in profit & loss account or capitalizing with the assets. If you are transferring the duty and tax in input credit account, input credit may be availed with output services.

Madhukar N Hiregange

Madhukar N Hiregange (Expert)
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12 December 2010 The credit for the capital goods [ no depr on the credit] can be availed 50%. Inputs can be availed and inpout services. It maybe advisable to register and keep availing the credit and also filing the returns.

Suresh Ramaswamy

Suresh Ramaswamy (Expert)
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15 December 2010 Input credit can be availed on all inputs. In case of consumables, full input credit can be availed, and in case of Capital Goods input 50% credit can be availed in the year of purchase / installation and then balance 50% on the same goods in the subsequent year.

HOWEVER, IT IS ESSENTIAL THAT YOU GET REGISTERED WITH CENTRAL EXCISE / SERVICE TAX AUTHORITIES, since the Department may later deny credit for the pre-registration period, leading to un-neccessarty litigation.

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