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Input service used for providing work contract service

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sanket

75 Points Posted on 10 September 2014

Dear All,

We (Public Limited Company) are in EPC business i.e. we providing work contract service as well as normal services. We use various service as well as sub contract service.

As per Definition of input service - Any service use for providing output service of work contract will not treated as input service....BUT as per one supreme court decision sub contract service used for providing work contract service is available for input credit.

My Question is......Whether input of All service can be set off OR only input of sub contract service can be set off??? Against work contract service???

AND if only input of sub contract can be set off against output service of work contract THEN whether input of other then sub contract service can be set off against output of other services (Like Manpower supply)..??

Please kindly suggest on above situation....

Waiting for your reply.Thanks in advance.

Replies (1)

Vikas

1135 Points Posted on 10 September 2014

Hi Sanket,

Cenvat credit on inputs and input services is governed by their respective definitions under Rule 2(k) and (l) of the Cenvat Credit Rules, 2004 (‘CCR’), respectively. Therefore, one has to refer to such definitions to understand whether a service qualifies for being an ‘input’ or an ‘input service’.

In your case, the Cenvat credit, generally, can be claimed on the sub-contractor’s services. Further, other services that qualify to be an ‘input service’ should be eligible for Cenvat credit. Services such as ‘manpower recruitment’ is specifically covered under the definition of ‘input service’. Therefore, you should be eligible for claim the Cenvat credit on such services.