SERVICE TAX INPUT CREDIT

[chandrashekhar bathini]

Respected sir,

a Andrapradesh company paying service tax on construction activity @ 14.5% on 30% value of contract(cannot differentiate material and service portion),

it purchasing inputs (cement, steel ,sand etc) in steel purchases invoice contains excise duty ,shall i get excise duty as input against output service tax

AI Summary

Cenvat credit denial where works contract supplier avails abatement for material value, excise duty on inputs not creditable.
Where a works contract provider avails statutory abatement that excludes material value from the taxable service, Explanation 2 to Rule 2A of the Service Tax Valuation Rules prohibits taking CENVAT credit of duties or cess paid on inputs used in relation to that works contract; the material value being excluded from taxable value negates entitlement to credit on such inputs, and valuation rules and exemption notifications must be read together to fix the appropriate taxable base.