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Cenvat Credit on Building Construction

Amit Bhatkar (Service) (457 Points)

06 September 2008

Dear All,

Ours is Manufacturing Company. We are setting-up new factory building as a part of expansion.

Can we claim CENVAT credit on the purchase of Steel which is being used in the Construction of Factory Building ?

PLease Advise

Amit

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4 Replies

NIKUNJ RATHI (C.A) (56 Points)
Replied 07 September 2008

Please refer Rule 2 (L) of the CENVAT Credit Rules, 2004 for the same defining "Input Service". This definition clearly lays down that Input Service includes services used in relation to setting up, mordenization , renovation of repairs of a factory.............

So you can avail CENVAT Credit on the purchase of steel.

Nikunj Rathi

SANJAY (SERVICE) (0 Points)
Replied 19 September 2008

Dear Nikumj,

you are correct on input services used for setting up of factory , we can avail credit but steel purchase for factory is not covered under defination of Input Services so i think credit is not eligible as well as it is not covered under defination of Capital goods.

So please clarify how can he will take credit on steel purchase for factory construction.

(Guest)

Boudry wall of a factory is a factory building or not ?

Chandra Sekhar P (G.M. Finance & Accounts) (116 Points)
Replied 27 September 2008

Steel is not an input for u. You r using steel inconstruction of building i.e., capital goods. At the same time steel does not come under the heads 82,84,85,90 or 68.02 subheading6801.10.

Pl. refer rule 2(k) and notification 67/95.