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 and SUN]

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

Cenvat credit on service tax: availability depends on works-contract service classification and proper reverse-charge documentation.
Cenvat credit on the service portion of a works contract depends on service classification: civil construction and structural support for capital goods are excluded from input services and not creditable under reverse charge; modernization or improvement of a factory is treated as creditable; repair, maintenance or renovation of factory premises may be credited if service tax paid under reverse charge is evidenced by the GAR-7 challan.