Set off of service tax payable with excise duty

Queries 2578 views 5 replies

Dear Sir,

 

The builder who is engaged in construction of residential complex and opted for payment of service tax @ 10.3% on 33% of Construction Cost is eligible to set off his service tax liability with Excise duty [Excise duty taken from Steel Purchase Invoices & Cement Purchase Invoices].

 

Is the above statement true?

 

If it is true, then will it be applicable to Works Contractors who opted for Composite Scheme for Payment of Service Tax @ 4.12%?

 

Under what circumstances Excise duty paid on material purchases can be availed to setoff from Service Tax Payable?

 

Kindly reply even if partial answer is known...

 

Thanks in Advance!!!

Replies (5)

33% option is under Not.1/2006 where NO credit is available.

 

Builder can opt for any one methodology for each project. Same project under Not.1/2006 and then changing to compostion @ 4.12% is not possible.

either abatement ( composition scheme) or cenvat credit can be availed, 

both is not available at same time.

If abatement is opted, no cenvat credit is admissible. If composition is opted, credit of input services and capital goods are available. If you want credit of  construction materials, you have to pay service tax @ 10.3 % of the gross contract amount including materials.

Dear sir,

 

Thanks to both of you.

 

Is really Excise duty paid on material purchases will be available to setoff from Service Tax Payable?

 

Under what circumstances Excise duty paid on material purchases can be availed to setoff from Service Tax Payable?

 

Please mention Any notification / cricular / section reference in Act (if Availabale)

 

Please reply in relation to Construction of Residential Complex Service.

 

Thanks in Advance!!!

I Just got you answer Unnikrishnan Sir.

I understand that, the excise duty is not available to setoff from Service Tax Payable in case where I sought abatement.

Thanks for All of you.


CCI Pro

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register