Service Tax Credit on Construction Consultancy Charges

[Bhairob Chandra Bor]

Dear Expert,

we are under the construction of a factory cum office building . Basement, Ground and 1st Floor for Factory and 2nd floor for office. we are not available service tax credit on the construction bills. Kindly advice for the following:

1. are service tax credit available on Architect Fee, Electrical and Interior design consultancy etc.?

2. are service tax credit available on charges on electrical fitting, ac installation and other charges, if separate contract are given for the factory part and office portion ?

3. also advice if separate contracts are given to a same supplier for supply of materials and erection/installation then are service tax liable for materials also (materials are supplied along with applicable tax rates) ?

4. is the labour cess applicable for construction of factory building also? like in our case?

Kindly advice.

kind regards,

bcb

AI Summary

Service Tax Credits Not Applicable for Construction Setup; Separate Supply Contracts Exempt; 1% Labor Cess Applies A user inquired about the availability of service tax credit on various construction-related expenses for a factory and office building. The questions concerned whether service tax credits apply to architect fees, electrical and interior design consultancy, and installation charges when separate contracts are issued. Additionally, they asked about the applicability of service tax on materials supplied under separate contracts and the labor cess for factory construction. An expert responded, clarifying that services related to setting up activities do not qualify for input service credits unless they pertain to modernization. Separate contracts for supply and service do not incur service tax on the supply portion, and a 1% labor cess is applicable.