can any one help out me on the following query.
we are constructing a hotel which will be run by us, we are paying service tax on the services received from technical/ architectures and professionals Indian as well as foreign and our project is under construction and will completed after 3 year. whether we received the service tax credit on the same (service tax paid under construction period )on carry forwarding the same.
Brajesh
With effect from April 1, 2011, Notification no.13/2011-CE.NT has amended rule 4(7) of the Cenvat credit rules 2004. Amended rule 4(7) is reproduced below:-
The Cenvat credit in respect of input service shall be allowed, on or after the day on which the invoice, bill or, as the case may be, challan referred to in rule 9 is received:
Provided that in case of an input service, where the service tax is paid on reverse charge by the recipient of the service, the Cenvat credit in respect of such input service shall be allowed on or after the day on which payment is made of the value of input service and the service tax paid or payable as indicated in invoice, bill or, as the case may be, challan referred to in rule 9
Provided further that in case the payment of the value of input service and the service tax paid or payable as indicated in the invoice, bill or, as the case may be, challan referred to in rule 9, is not made within three months of the date of the invoice, bill or, as the case may be, challan, the manufacturer or the service provider who has taken credit on such input service, shall pay an amount equal to the Cenvat credit availed on such input service and in case the said payment is made, the manufacturer or output service provider, as the case may be, shall be entitled to take the credit of the amount equivalent to the Cenvat credit paid earlier subject to the other provisions of these rules.
As per above ammendment, you can claim input credit for only 3 months before the commencement of activities/ providing services.
Any way lets wait for experts opinion also.....
The definition of ‘input service’ under Rule 2(l) of CENVAT Credit Rules, 2004 has been substituted by the new definition vide Notification No.3/2011-CE (NT), dated 01.03.2011 which came into effect from 01.04.2011. According to the new definition-
‘Input service’ means any service-
(i) used by a provider of taxable service for providing an output service; or
(ii) used by a manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and clearance of final products up to the place of removal, and includes.................but does not include services of .....................................................
Hence the defination has Main Part. Inclussion part and Exclussion part.
The exclussion part states as below
but excludes services,-
(A) specified in sub clauses (p), (zn), (zzl), (zzm), (zzq), (zzzh) and (zzzza) of clause (105) of Section 65 of the Finance Act (hereinafter referred as special services), in so far as they are used for-
(a) construction of a building of a civil structure or a port thereof; or
(b) laying of foundation or making of structures for support of capital goods, except for the provision of one or more of the specified services;
That is...
The above said specified services are excluded in so far as they are used for-
CONCLUSSION: THE INPUT CREDIT OF THE ABOVE SERVICES USED FOR CONSTRUCION OF BUILDING CANNOT BE AVAILED
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