CENVAT CREDIT TO DEVELOPERS

[NANDKUMAR SAGWEKAR]

Our client is builder / developer and paying the service tax under category Construction of residential complex . He pays service tax after taking abatement of 75% on amounts collected from the prospective buyer. He is also availing services of other subcontractors who are registered Service tax assessees and charging service tax @12.36% in their invoices. These sub contractors are purely service providers . Entire materials is supplied by our client ( developer / builder ) . In this case whether this Builder / Developer can avail the cenvat credit on services availed for construction of residential complex. The services availed are mainly plastering, slabs , floor tiling on labour charges basis.

We require your expert opinion , on this subject

Thanks

AI Summary

Developer Can Claim CENVAT Credit on Input Services for Residential Projects, Not on Inputs, Per Notification 26/2012. A builder/developer is inquiring about the eligibility to claim CENVAT credit on services used in the construction of residential complexes. The developer pays service tax after a 75% abatement and engages subcontractors who charge service tax at 12.36%. The subcontractors provide services like plastering and tiling, while materials are supplied by the developer. An expert confirms that the developer can claim CENVAT credit on input services but not on inputs. The discussion references notification 26/2012 for further guidance.