Service Tax credit on retention Amount

Saroj Rout (CA FINAL) (120 Points)

11 March 2011  

Ours a manufacturing company taking cenvat credit on service tax paid on works contract services. While releasing the payment some amount retained as retention against any faulty works.(% on contract price.).

Suppose Rs 1000 is the contract price.

Billing done as:-                          

Basic-                            1000

ST @ 10.3%                     103

Please advise how much we will take credit (If we are releasing the payment 90% of contract price i:e Rs 900 )