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Service Tax Input Credit

Queries 625 views 3 replies

Jayesh

accountant

42 Points Posted on 15 July 2010

Dear Sir,

We are a turnkey project undertaker and registered with service tax as a works contract service provider.

We purchase some of excisable material in execution of works contract.

Kindly Let me know that:-

Is such excise duty paid on purchase, available as cenvat credit against output service tax on works contract service?

Regards,

Jayesh Khatri

Replies (3)

Harsha

Chartered Accountant CS (Final)

227 Points Posted on 15 July 2010

Yes, the cenvat credit can be availed on all the material used for works contract. But, the only thing is service tax should be charged on full value of the invoice i.e. both material and labour portion. Further VAT is to be charged material portion.

If the customer is a Service provider / manufacturer then, he can take the Service tax credit.

Prabhat Kumar

Advocate & Consultant

1912 Points Posted on 15 July 2010

Any duty paid on input for capital goods and which is received in the premises of the output service provider, can be taken as the cenvat credit (Rule 3 Cenvat credit rules).

CA Ashish Joshi

265 Points Posted on 15 July 2010

Being a service provider, you can take CENVAT credit of excise duty paid on any purchases of goods or services used in provision of your services(except credit for capital goods - as rules for capital goods are different). Ashish Joshi