Hi, A company is a service tax registered assessee. It is having a centralised registration for all of its premises. Now, the company wants to set-up two Buildings- One for parking purposes and one for amenities (viz. Gym, sports club etc). Can the assessee claim cenvat credit on service tax paid on construction of these 2 buildings?
Please reply ASAP.
Hi Poonam,
The issue you are having is long debated issue. See the basic criteria for availing any input CENVAT credit is that such Input service or input should be relatable to your final product or services. As the definition of Input Services itself says - Input services used in or in relation to final output service or manufacture of a final product directly or indirectly.
Now we have to see that whether parking facility and gym, sports club contibutes to your final out put service or not.
Tribunals and courts in few instances have said that such facilities are for the facilitation of their employess who intern are the integral part to provide the out put service.
Therefore any duty or service tax paid in erecting such premises/ building should be eligible for cenvat credit.
Refer definition of Input service Rule 2 (l) (ii).
Regards
Jeevesh Mehta
Ph: 9811617186
Hi Jeevesh.. Thanks for the reply. Do you have any case law on the same?
Case laws under central excise provide the basic idea of the scheme which is afacilitating and enabling scheme.
The case laws in ST have concentrated on what is available for manufacturing sector since they are under audit.
The construction services are part of the 16 services where bifurcation is not required to be made under Rule 6 (5) for usage in taxable and non taxable categories. Since the services of setting up/ modernisation are allowed specifically in the input service defintion in my view there is no doubt as to the availability of the same.
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