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input cerdit on construction service

10 May 2007

a comercial & indistrial construction service register unit with service tax(electrical,plumbing,paint,carpentery work) charge to client service tax under abetment. can the unit avail the input service credit of its vender who charge him service tax

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Tony Mp (94 Points)
Replied 10 May 2007

Dear sir,

Since you are availing abatement @ 67%, you cannot claim credit of duty paid on inputs or Capital goods used for providing taxable service. However, you can very well claim the service tax and cess paid on input services from your tax liability.

It may please be noted that wef 1.3.2006, no CENVAT can be taken if abatement claimed. WEF 1.3.2006 you cannot avail any type of credits including on input services if you avail abatement.

TONY.M.P., THRISSUR, KERALA STATE
94470 80631
trc_mptony @ sancharnet.in