Service tax credit on factory building being constructed

We are constructing a new factory building.  For building construction we are paying our vendors works contract service of 4%.

Kindly clarify whether service tax credit can be taken on this building service tax paid.

Pls note this is a green field project.

 

regards

N T VINODH

Replies (3)

building is not a capital good for service provider,  as per CCR 2004

no input credit unless the business of providing taxable services is established, 

hence with both points input credit is not available

Service tax relating to settin up is not available as credit.

Please note that the credit of service tax or excise duty paid can be availed if & only if the services availed or the goods are used in or in relatiion the manufacture of the final product. 

The new building constructed does not results in using it in or in relation to the manufacture of the final product, hence the service tax paid cannot be availed as an input service.

however you can claim depreciation u/s sec 32 of the I-T Act by capitalizaing the taxes/duties paid on construction of the new factory building.

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