All expenditure related with one business premise was capitalised in the year 2009-10 including the input service tax components on expenses ike architect fees, project management consultancy etc which could be taken as cenvat credit. Business has also claimed depreciation for the year 2009-10.
Is it possible to reverse the capitalization to the extent service tax on input service is concerned and take cenvat credit? Is there any time limit? What is the best way out to get these cenvat credit? By anyway from 1st April 2011, input service tax credit is not available on construction of building etc.
Business Seeks Cenvat Credit Reversal for 2009-10; No Time Limit for Claim, But Construction Inputs Excluded Post-2011 Amendment. A business capitalized all expenses, including input service tax, in 2009-10 and claimed depreciation. They inquired about reversing the capitalization of service tax components to claim Cenvat credit. A respondent advised that there is no time limit for claiming Cenvat credit. The service tax on input services should be deducted from the fixed assets schedule in financial statements and reflected in depreciation calculations under the Income Tax Act. After these adjustments, Cenvat credit can be claimed. However, following the Finance Act amendment in 2011, Cenvat credit on inputs related to labor charges for construction is not available. (AI Summary)
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