Query on input tax credit on capital expenditure

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VINAY S PARIKH

PROPRIETOR

21 Points Posted on 07 November 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

105 Points Posted on 07 November 2013

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

333 Points Posted on 08 November 2013

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.