Construction of new factory and input service tax credit

[govindaraj kolappan]

Dear Sirs / Madam

We are an export unit

going for expansion of factory building

the construction contract is given to a builder

Builder is charging service tax @ 40% of the construction value @14.5%

Question : whether this service tax credit can be taken as input credit of other out put services performed within India

if not , whether we can apply for refund against the export to be made out of the new factory

Kindly give your views

With regards

AI Summary

Cenvat credit on factory construction: generally not available and refund claims carry high litigation risk.
The discussion concludes that service tax on factory construction is generally not eligible for Cenvat/input service credit nor refund for exports because construction charges are treated as civil construction and addressed through depreciation; although some appellate decisions have allowed credit for specific past periods, such precedents are period- and fact-specific and claims carry substantial litigation risk, so conservative practice advises against availing credit or seeking refund when Cenvat rules do not expressly permit it.