Query on input tax credit on capital expenditure

Queries 4836 views 2 replies

VINAY S PARIKH

PROPRIETOR

24 Points Joined September 2013

Our client is providing music composition service and having service tax registration wef 1/7/2012 under taxable service other then 119 taxable services.

He has purchased premises for music studio & entered into contract with the Architect for designing & interior of proposed music studio for a contract price of Rs. 60 lacs + Service Tax of Rs. 7,41,600/-.

Our query is, whether our client would get input credit set off of Rs. 7,41,600/- against his output service tax collection under music composition service.

Can anyone help ?

Replies (2)

Sidharth

Article Assistant

80 Points Joined September 2011

According to my knowledge u cannot avail cenvat credit in respect of construction of builiding or part /laying of foundation or making support of structures for support of capital goods :

       - Port
       - Other Port
       - Airport
       - Commercial or Industrial Construction
       - Consturction of Complex
       - Works Contract
       - Architect Services

CA. Narottam Kumar Rawat

Indirect Tax Consultant

399 Points Joined October 2008

Dear Vinay,

Please ensure that services are purely for designing and architect and not fall under "Works Contract" or "Construction Services". Please see the relevant definitions.

Extract of definition of Input services is as ...."includes services used in relation to modernisation, renovation or repairs of a factory, premises of provider of output service.."

Therefore, in case it is pure architect services then CENVAT Credit can be claimed subject to other eligibility.