Input Credit on Excise Duty paid for Output Service Tax

[Indrajit Mondal]

Dear Sir,

We are Pvt Ltd Company and registered under ST as Works Contractor Service...

My Query is when we are purchased cements from vendors we paid Excise Duty which we will use for construction of residencial complex for sale and and other WCT works so we have pay Service Tax under WCT

So my question is can we claim the Excise duty input against pay the Service Tax liability..

Please suggest with Notification..

[Rajagopalan Ranganathan]

Sir,

As per Sl. No.12 of Notification No. 26/2012-ST dated 20.6.2012 as amended "Construction of a complex, building, civil structure or a part thereof, intended for a sale to a buyer, wholly or partly except where entire consideration is received after issuance of completion certificate by the competent authority" is eligible to avail 30% abatement of gross amount charged for the contract provided

(i) CENVAT credit on inputs used for providing the taxable service has not been taken under the provisions of the CENVAT Credit Rules, 2004.

(ii) The value of land is included in the amount charged from the service receiver.

[Ganeshan Kalyani]

In my view credit is not eligible.

[Himansu Sekhar]

If you claim abatement on act, no credit on cements allowable. If you talk about gst where there is no abatement, credit on such goods allowable. But certain conditions have to be fulfilled

[Himansu Sekhar]

Notf. 26/12 st has mentioned such condition not to avail credit on inputs

[Mr Rao]

Dear querist,

you cannot avail Cenvat Credit on inputs for providing such taxable service. This is a pre-condition for availing the abatement of 70% of the gross amount charged in terms of the abatement Notification 26/2012-ST dated 20.06.2012 as amended by Notfn.No.08/2016-ST Dt.01.03.2016 w.e.f 01.04.20116. I support the views of experts.

AI Summary

Cenvat credit restriction prevents claiming excise duty on inputs against service tax when abatement is claimed. CENVAT credit on excise duty paid for inputs used in construction services intended for sale is not allowable if the service provider claims the abatement under the works contract notification; the notification conditions that CENVAT credit on such inputs has not been taken, and this operates as a precondition to avail the abatement.