Service tax on works contract

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

02 January 2014 We are providing Annual Maintenace contract of UPS to our customers.

We are unable to bifurcate between component charges and service charges.

Under Service tax can we charge 12.36% on the entire value(100%) of AMC instead of 60% value and take input credit as we have lot of CENVAT credit. Kindly suggest.

Note: For Sales tax under KVAT we are charging VAT on 75% on AMC value.

Gopalkrishna Hegde ,CA,DISA

Gopalkrishna Hegde ,CA,DISA (Expert)

02 January 2014 Hi

As per the information above and my understanding

The AMC of UPS would be covered under definition of works contract under sec 65B(54).

Hence service tax valuation rules will apply for determination of value for service tax

n case of works contract service (and also service of construction of residential/commercial flats and buildings), Cenvat Credit of service tax paid on input services and excise duty paid on capital goods will be available.

However, Cenvat credit of input goods is not available - See Sr No. 12 of Notification No. 26/2012-ST dated 20-6-2012

Gopalkrishna Hegde ,CA,DISA

Gopalkrishna Hegde ,CA,DISA (Expert)

02 January 2014 Hence cenvat credit on inputs that is the material bought and used in AMC cannot be availed as credit

Gopalkrishna Hegde ,CA,DISA

Gopalkrishna Hegde ,CA,DISA (Expert)

02 January 2014 Hence cenvat credit on inputs that is the material bought and used in AMC cannot be availed as credit

Gopalkrishna Hegde ,CA,DISA

Gopalkrishna Hegde ,CA,DISA (Expert)

02 January 2014 Hence cenvat credit on inputs that is the material bought and used in AMC cannot be availed as credit

Gopalkrishna Hegde ,CA,DISA

Gopalkrishna Hegde ,CA,DISA (Expert)

02 January 2014 Hence cenvat credit on inputs that is the material bought and used in AMC cannot be availed as credit

Querist : Anonymous

Querist : Anonymous (Querist)

03 January 2014 Dear Sir,
Am I eligible to take credit on input service and excise duty on capital goods purchased even if I avail abatement of 40% and charge service tax on 60% Works Contract value.

Annu Agarwal

Annu Agarwal (Expert)

03 January 2014 Yes Sir
You can utilize the cenvat credit in respect of input service and capital goods.As Explanation 2 to Rule 2A(ii) of Valuation Rules prohibits utilization of cenvat credit in respect of INPUTS.

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