CENVAT credit on construction service whether eligible

[Yatin Bhopi]

Dear experts,

We are manufacturer or organic chemicals. We are having effluent treatment plan (ETP) in the factory which is required for doing necessary treatment (statutory requirement under MPCB) on waste water before removing from the factory. Recently we have re-construct the effluent treatment tank ( civil structure) to increase the capacity of the tank. Now we have received the bill from the service provider for construction of tank (works contract)

My query is:

After going through the definition of input services (exclusion clause in the definition where construction service use for any civil structure is excluded from the definition) Is CENVAT credit available to us?

[Arun Kumar Singh]

Yes, the cenvat credit will not be available on input service in respect of work contract.

[Ganeshan Kalyani]

Cenvat credit is rightly eligible as ETP is and essential and integral part of manufacturing activity.

AI Summary

Cenvat credit on construction services contested where ETP reconstruction may be integral to manufacturing and compliance. Eligibility of CENVAT credit for reconstruction of an effluent treatment plant turns on whether the works contract constitutes a construction service excluded from 'input services' or whether the ETP is an essential and integral part of manufacturing making the service creditable. Expert responses conflict: one denies credit treating it as excluded construction; the other allows credit treating the ETP as integral to manufacturing and compliance.