Service tax - input credit

A person provides taxable service from a premises which is used as his residence and office space. THe service provider had purchased the apartment after payment of service tax. Can the same be claimed as input credit ????

Replies (6)

Hi Dhawal, 

Well Yes you can, lest you got the details with which you can prove certain things. 

Now this is only if you have paid tax at the full rate. 

1) First, the premise needs to be on your name and registered with your jurisdiction. Please bear it in mind that the departmental officers do visit the premise for conducting survey & audits. 

2) The flat should be on the books of account of the service provider. 

3) Separate accounting should be done for Service Tax paid on Flat purchased, i.e to transfer the same on Cenvat Receivable account or similar account. 

4) Avail 50% of the Cenvat of Flat during the First year & Rest during the Later years. As Maximum Cenvat Availment is restricted to 50% on Capital Input Services. 

If you have paid service tax under composition scheme..... No Credit can be taken. 
Well though can you take credit on the grounds that its an Input Service for you and you're not aware what scheme builder has used to charged service tax. However, be prepared with all your armour and weapons to fight with the department since they definitely shall not allow Cenvat so easily. 

Regards, 
RR.
 

Many Thanks Mr.Rohan. 

Is there a seperate material/section/rule which i could refer to for this particular purpose???

Cenvat Credit Rules, 2004
Works Contract Composition Scheme Rule, 2007

Also refer to these Services, 
Works Contract Services. 
Commercial & Industrial Construction Services. 
Construction of Residential Complex. 


Regards, 
RR.

If the person provides the service in a firm name, the flat registration should be in the same name. The building comes under the capital goods and hence in the Income tax Act, depreciation should not be claimed,which please note.

 

rengaraj r.k

@ Rengaraj : Agreed, Depreciation should not be claimed, but it should not be claimed on the duty portion on which assessee has availed Cenvat Credit. (As per Rule 4(4), CCR 2004)


 

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