Works Contract ---- Input Service Credit

[puneet virmani]

A is a contractor registered under works contract service. A sub contracts the part of the contract to B. B charged service tax from A on labour services provided to A . Can A gets the credit on input services provided to A by B. B is registered under manpower suplly agency as providing labour services to A.

[K Balasubramanian]

Yes. There is no bar on availing credit of input services which are used in the course of execution of output service

[RadheyShyam Mangal]

In case of Works Contract Services, the credit if Input service and Duty paid on Capital Goods can be availed but not of Input. Hence can take Cenvat of Service Tax charged by Sub- Contractor

AI Summary

Input service credit for works contract: service tax paid to a subcontractor for labour may be claimed as credit where used in providing the output service. Whether a principal contractor under works contract services may avail credit for service tax charged by a subcontractor supplying labour: one view states no bar to claiming credit for input services used in providing the output service; an alternate view confirms that input service credit and duty on capital goods are available for works contract services and that Cenvat of service tax charged by a subcontractor can be availed.