Sir,
In case of Work Contract of repairs and maintenance , need to pay service tax on 70% value of the contract and ST on 30% value of the service.
However do we need to reverse the CENVAT credit of inputs used in providing the service on the remainin 30 % value of the Goods as above, used in that services.
Regards
Pradeep Jain
Debate Over CENVAT Credit Reversal on Works Contracts: Rule 2A Clarification and Different Interpretation for Machinery Repairs A query was raised regarding the application of service tax on works contracts for repairs and maintenance, specifically whether CENVAT credit must be reversed on 30% of the goods value used in providing the service. One response clarified that under Rule 2A of the Service Tax Determination, CENVAT credit cannot be taken, thus negating the need for reversal on the remaining goods value. Another response argued that CENVAT credit should be allowed if the service involves repair and maintenance of machinery used in manufacturing excisable goods, suggesting a different interpretation for such scenarios. (AI Summary)
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