service tax credit eligible -reg

[Ramakrishnan Seshadri]

we have received an professional service bill wherein they have obtained structural stability certificate for our factory building . In that invoice they have charged service tax @ 14% ST and SBC@ 0.50%

My question is whether service tax paid on that is eligible for credit or not.

Thanks & Regards,

S.Ramakrishnan

[KASTURI SETHI]

Service Tax paid is eligible for Cenvat Credit as input service for providing taxable output service or payment of Central Excise duty on dutiable final product. No Cenvat Credit is admissible on SBC.

[Ganeshan Kalyani]

I agree with Kasturi Sir view.

[Rajagopalan Ranganathan]

Sir,

With due respect to the views of experts I feel that structural stability certificate for your factory building is given to a newly constructed building. Service Tax paid on input services used for constructing a new factory building is not eligible for cenvat credit under rule 2 (k) of Cenvat Credit Rules, 2004. On the same analogy service tax paid for obtaining structural stability certificate of your factory building is not eligible for credit. In respect of SBC no credit is available.

[Ramakrishnan Seshadri]

Dear Sir,

Thanks for your reply. But the building stability certificate is not for the newly constructed building. It is for the already existing building.

Thanks & Regards,

S.Ramakrishnan

[KASTURI SETHI]

Dear Sh.S.Ramakrishnan and Sh.Rajagopalan Ranganathan Ji,

With due honour, I respectfully submit that it makes no difference whether structural stability certificate has been issued for old (existing) building or new building. Cenvat credit is available on this service as input service as already explained. This service, inter alia, relates to immovable property as is evident from the definition of “technical inspection and certification ” appended below for ready reference. The process of the service of issuance of such certificate is initiated only after the completion of new construction services or is issued for the old existing building to ascertain whether viable or not. The construction is over and the process of certification of immovable property starts. This service i.e. certification is meant for immovable property and not for construction services. In other words, construction service is relegated to the background. The Engineer certifies the quality, standard, safety and viability of immovable property may be office building or factory building or shopping complex or any other building whether new or old. Though the under mentioned definitions are under erstwhile Sections but these are valid not only for statistical purpose but also for clarification of the concept.We cannot ignore the fact that old accounting codes are still valid with the sole purpose to avoid any confusion regarding classification of the service. Pl. read the definitions between the lines and if I am in the wrong I would be happy to accept your opinion as education for me.

As per Section 65 (105) (zzi) taxable service means any service provided or to be provided to any person, by a technical inspection and certification agency, in relation to technical inspection and certification;

As per Section 65(108) , “technical inspection and certification” means inspection or examination of goods or [process or material or information techno-logy software] or any immovable property to certify that such goods or [process or material or information technology software] or immovable property qualifies or maintains the specified standards, including functionality or utility or quality or safety or any other characteristic or parameters, but does not include any service in relation to inspection and certification of pollution levels;

(109) “technical inspection and certification agency” means any agency or person engaged in providing service in relation to technical inspection and certification

[Ganeshan Kalyani]

Detailed reply. Thanks.

AI Summary

Input service credit for technical inspection and certification of buildings may be available, but small levies remain non-creditable. Service tax on issuance of a structural stability certificate is a taxable technical inspection and certification service and, when used as an input for taxable output services or manufacture attracting central excise, the service tax component is eligible for Cenvat/Input service credit; statutory levies such as the Swachh Bharat Cess are not creditable. A divergent view treats certification tied to new construction as excluded from credit on the basis that it is used in construction activity, making the characterization of the service decisive.