Errection & commissioning service

[yateen vyas]

Sir,

We are a manufacturing company we have taken a service for our machine installation fabrication and erections service.

Now my question is that can we avail Cenvat credit on Fabrication,Erection and installation service.

Please also note this is note a Works contract service.

Rgds

Yateen vyas

[YAGAY and SUN]

Dear Yateen,

In our opinion it is eligible since in relation to manufacture or provision of taxable goods/services.

Regards,

YAGAY and SUN

(Management and Indirect Tax Consultants)

[Akash Deep]

Dear Yateen

I assume that erection commissioning and installation services are being received by you with respect to machines installed in your factory or factory premises and such machines are used in manufacturing of excisable goods. as per the definition of input services, service used by manufacturer whether directly or indirectly, in or in relation to manufacturing of final products shall be treated as input service. further further inclusion part of the definition of input services clearly stated that services used in relation to modersination of factory will also qualify as input services. being so, even if the machine installed or erected or commissioner by using erection commissioning and installation services are not actually used in manufacturing of excisable goods, even though such erection commissioning and installation services would qualify as input services.

You are eligible to take the credit of service tax paid on erection commissioning and installation services.

[yateen vyas]

Thanks for your reply sir

[MANASH MUKHERJEE]

One assessee is providing fabrication work in a cement factory. The department of CBEC has issued SCN to the asseessee as they are providing service under " errection , commissioning and installation ". The view of the assessee is that as the work of fabrication falls under manufacturing activity , and as they are paying Central excise duty , so service tax is not applicable to them. Who seems to be correct ? CBEC or the assessee

AI Summary

Cenvat credit eligibility for erection, commissioning and installation services when used in or in relation to manufacturing.
Erection, commissioning and installation services used by a manufacturer in or in relation to manufacture of excisable goods, or for factory modernisation, qualify as input services; service tax paid on such services is eligible for Cenvat credit. A separate classification dispute may arise where a fabricator treats fabrication as manufacturing and pays excise, while revenue treats the activity as erection/installation service liable to service tax.