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Service Tax - Abatement of 70%-Construction Service

PAWAN KUMAR

Dear Sir,

An Company give contract to an construction contractor for constructing boundry wall in company's premises. The contractor is registered under service tax. The company provide all the materials freely to contractor. After completing the work, contractor raise the bill claiming 70% abatement and declare that he has not taken cenvat credit on inputs & input services used in providing the service.

Is contractor is eligible for claiming abatement of 70% under notification No.26/2012-ST dated 20.06.2012 (S.No.12) and liable only on 30% amount ?

Kindly provide your valuable opinion.

Regards,

Pawan Kumar

Contractor Seeks 70% Service Tax Abatement Under Notification No. 26/2012-ST; Conditions for Claiming Abatement Clarified. A company engaged a construction contractor to build a boundary wall, providing all materials. The contractor, registered under service tax, seeks to claim a 70% abatement under notification No. 26/2012-ST, asserting no cenvat credit was taken on inputs or services. One respondent clarified that the contractor can claim the abatement only if the contract is composite and the value of goods and services is inseparable. Otherwise, service tax must be paid on the full service value. The discussion highlights the conditions under which service providers can claim abatements and the implications for cenvat credit eligibility. (AI Summary)
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