Cenvat credit on works contract.

[MAYUR BHIRUD]

Dear experts,

We are manufacturer of chemical and executes a works contract for modernization of factory buildings( like painting, plastering). We already paid service tax under reverse charge mechanism. Can we take cenvat credit on service tax paid on works contract services.

Please give your valuable advice.

AI Summary

Cenvat credit on reverse-charge works contract services available if classified as modernization or repair, claim after payment.
Whether Cenvat credit is admissible for service tax paid under the reverse charge mechanism on works contract services for modernization or repair of factory buildings (painting, plastering) is debated; some contributors deny credit while others treat such services as qualifying Input Service, and practical advice states that under reverse charge the tax is paid in cash first and then Cenvat credit may be claimed if the service qualifies.