Works contract -input credit
This query is : Resolved
20 December 2014
A manufacturing company is constructiog its building and making payments to an individual against his bills for labour charges for building services.
The company itself is paying service @ 12.36% under partial reverse charge mechanism on labour charges by cash.
Whether the company can avail the aboce paid service tax?
The company itself is paying service @ 12.36% under partial reverse charge mechanism on labour charges by cash.
Whether the company can avail the aboce paid service tax?
CA R SEETHARAMAN
(Expert)
20 December 2014
Yes cenvat credit can be availed on the above payment.
Rupesh Jain
(Expert)
20 December 2014
company can take credit of service tax paid on bill of labour.
25 December 2014
thank u..bt how dey can take credit?
cos it is not input service na? den how its possible?
cos it is not input service na? den how its possible?
CA R SEETHARAMAN
(Expert)
26 December 2014
Cenvat credit on capital goods can be availed.
26 December 2014
Ya but in the definition of Input Service payments for Works Contract is excluded.
09 January 2015
Yes sir may i get your clarification regarding my above question ???
CA R SEETHARAMAN
(Expert)
09 January 2015
CENVAT credit on Input Services and Capital Goods Allowed As per explanation 2 of the determination of value rules, there is no restriction on claiming the CENVAT credit of Input Services and Capital Goods. Thus the provider of works contract service can claim CENVAT credit of Input Services and Capital Goods as per the CENVAT Credit rules 2004.
On the same analogy, service tax paid under RCM can be claimed.
On the same analogy, service tax paid under RCM can be claimed.
09 January 2015
s sir u r right dat PROVIDER OF WORKS CONTRACT SERVICE can claim credit..bt my query is regarding a manufacturing company wic is constructing building.please clarify
CA R SEETHARAMAN
(Expert)
10 January 2015
You are going to pay excise duty on the product you manufacture. Avail cenvat credit on capital goods i.e. service tax paid on construction of building.
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