service tax credit eligible on construction drawings-reg

[Ramakrishnan Seshadri]

Dear Sir,

We are constructing one new paintshop for our company. For this we have received invoice towards drawings for construction of this paintshop. They have charged service tax on their invoice. Our question is whether the service tax paid on this invoice is eligible for service tax credit.

Please clarify.

Thanks

S.Ramakrishnan

AI Summary

Service tax credit: input service definition limits credit for new factory set up but allows modernization related services.
Credit eligibility depends on the CENVAT definition of input service: post 1 April 2011 the definition includes services for modernisation, renovation or repairs of factory or premises (creditable) but excludes services used for the setting up of a factory or premises of an output service provider (not creditable). Thus credit is available where drawings serve modernization/repair, but not where they relate to setting up new premises.