Cenvat on real estate developers

Sir 

My client is Private ltd company building residential flats and charging service tax a

@ abated rate i.e. 3.5 %.

they sub contracted thier work to another company.

That comapny raised invoice for works contract taking value of 40 % (service portion) and 50 % of service tax to be paid by reciepient and 50 % service tax to be apid by service provider . 

My querry is whether the service recipeint is eligible for cenvat of 50 % of service tax he paid.

 

In my opinion yes, he can take cenvat credit

Please confirm

 

Replies (1)

"My client is Private ltd company building residential flats and charging service tax a @ abated rate i.e. 3.5 %."  ........................." In my opinion yes, he can take cenvat credit"...........HOW?

Check Notification No. 26/2012- Service Tax:

................Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 211 (E), dated the 17th March, 2012, the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts the taxable service of the descripttttion specified in column (2) of the Table below, from so much of the service tax leviable thereon under section 66B of the said Act, as is in excess of the service tax calculated on a value which is equivalent to a percentage specified in the corresponding entry in column (3) of the said Table, of the amount charged by such service provider for providing the said taxable service, unless specified otherwise, subject to the relevant conditions specified in the corresponding entry in column (4) of the said Table, namely;-

 

12.

Construction of a complex, building, civil structure or a part thereof, intended for a sale to a buyer, wholly or partly except where entire consideration is received after issuance of completion certificate by the competent authority

25

(i) CENVAT credit on inputs used for providing the taxable service has not been taken under the provisions of the CENVAT Credit Rules, 2004.

(ii)The value of land is included in the amount charged from the service receiver.

 

 Unless ST at full rate is charged!!

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