Excise under Works Contract Tax

[vipul DODIA]

Dear All,

We are involved in fabrication of Doors and Windows in Aluminum, our purchase like Aluminum and Glass are normally excise paid purchases from principal suppliers.

Our clients are mostly builders and developers.

We get orders in form of Works Contract with tax structures of 5 percent MVAT on total value + 7.416 percent Service Tax on total Value.

As on today we are not availing any benefit of Cenvat credit / Service tax paid on Input services from sub contractors / processors.

Following are my queries :-

1] I would like to understand do  Excise play any role if my sales crosses over 1.5 cr under work contract with above tax structure?

2] Can we avail any input service tax credit with above tax structure ?

I would be very thankful to you all if I can get proper answer backed with govt. documents and rules.

Thanking You in advance.

Vipul Dodia

AI Summary

Excise liability for fabrication under works contract: on site assembly is not manufacture; offsite fabrication may trigger excise, credit possible.
Excise liability depends on whether fabrication constitutes manufacture or mere on site assembly: on site assembly or cutting to size is non manufacture and not subject to excise, whereas off site fabrication followed by removal to site may be treated as manufacture and tested against the turnover threshold for excise and cenvat credit eligibility. Input service tax credit is available for service tax paid and for capital goods/services used in providing taxable services.