CENVAT CREDIT ON REPAIRS TO OFFICIAL BUILDINGS

[hardik thacker]

CENVAT CREDIT ON REPAIRS TO FACTORY BUILDINGS

As per the definition of Input Service ( Rule 2(l) ), Input Service includes "services used in relation to modernisation, renovation or repairs of a factory, premises of provider of output service or an office relating to such factory or premises"

and excludes "service portion in the execution of a works contract and construction services including service listed under clause (b) of section 66E of the Finance Act (hereinafter referred as specified services) in so far as they are used for - (a) construction or execution of works contract of a building or a civil structure or a part  thereof; or (b) laying of foundation or making of structures for support of capital goods, except for the provision of one or more of the specified services;"

from the above, 1. Can we avail the CENVAT credit on repairs to factory buildings which may comes under the category of works contract service.

AI Summary

Cenvat credit on repair and renovation hinges on whether works are repairs to factory premises or construction of a building.
Eligibility for CENVAT credit depends on Rule 2(l): input services include renovation, modernization or repairs of a factory or premises, but exclude the service portion of works contracts and construction services when used for construction/execution of a building or civil structure or for laying foundations or support structures; whether repairs to factory buildings qualify turns on whether the work is properly characterised as repair/renovation of factory premises (creditable) or as works contract/construction of a building/civil structure (excluded).