Input service credit

[Sanjeev Chauhan]

Respected Sirs,

Please guide, One p. ltd. co. is a builder and engaged in Construction of Residential Complexes. The said co. is paying brokerage charges to broker for sale of flats and taking credit of service tax paid on brokerage by the broker.

Also, the co. is engaged in providing project management & consultation services to other builders and using the same service of the said broker for sale of flats of other builders.

Now, the service tax department is saying that the s.t. paid on brokerage charges does not fall under the definition of input services and thus not eligible for taking credit.

Is the co. is eligible to take credit of the said input service or not.

Regards.

AI Summary

Company Challenges Service Tax Credit Denial on Brokerage Charges; Suggested to Separate Bills by Service Type for Compliance. A private limited company involved in constructing residential complexes and providing project management and consultation services is facing an issue with the service tax department regarding the eligibility of service tax credit on brokerage charges. The department claims the brokerage charges do not qualify as input services for tax credit. A respondent suggests that the company should obtain separate brokerage bills for each service type-construction and project management-to substantiate the claim for service tax credit on each service individually, thereby avoiding potential litigation.