Service tax

Dear Soumav,

Firstly, Notification No.30/2012-ST does not prescribe for any abatement scheme, instead it prescribes for reverse charge mechanism. All the abatement related provisions are prescribed under Notification No.26/2012-ST.

Secondly, there is no abatement of 60% available to a works contractor. I believe you are referring to the Valuation mechanism of 40% on "Original Works" under Rule 2A of Service Tax (Determination of Value) Rules, 2006.

Thirdly, Soumev, you should refer to the Explanation 2 to Rule 2A, wherein there is a restriction on claiming Cenvat credit on inputs. Hence, you cannot claim any excise duty paid as Cenvat credit against Service tax liability on Works Contract Services.