Cenvat credit on Service Tax

[Samik Chaudhuri]

Sir

Can we avail Cenvat Credit on Service Tax as a recipient paid for service portion in the execution of a Works Contract? Please advise me at earliest.

With thanks & regards

Samik Chaudhuri.

[PAWAN KUMAR]

Dear sir,

Service portion in the execution of a works contract relatable to civil construction and structure for support of capital goods is in exclusion category of input services under rule 2(l). You cannot take cenvat of service tax paid under reverse charge.

[Ganeshan Kalyani]

If the works is toward modernisation / improvement of factory then credit would be allowed.

[YAGAY andSUN]

On repair, maintenance, renovation etc of the factory premises the CENVAT credit of Service Tax if paid under Reverse charge shall be available on the document GAR-7 Challan.

[Ganeshan Kalyani]

input service tax credit of service tax portion in works contract service is contentious issue. lot of litigation on this subject. Thanks.

AI Summary

Eligibility of Cenvat Credit on Service Tax for Works Contract Services: Exclusions and Permissible Credits Explained A participant inquired about the eligibility of availing Cenvat Credit on Service Tax for the service portion in a Works Contract. One response indicated that services related to civil construction for capital goods are excluded from input services, thus credit cannot be taken under reverse charge. Another response stated that if the work involves modernization or improvement of a factory, credit is permissible. Additionally, credit for repair, maintenance, or renovation of factory premises is available if paid under reverse charge with the appropriate documentation. The issue remains contentious with ongoing litigation.