CENVAT Credit Availability

[felix ka]

Hai experts,

what is your view on the cenvat credit availability of S T paid to 'construction services' received when a new plant was installed as a part of the renovation project of an existing factory? project commenced in 2009, payment to the construction contractor is pending. 

[BHARAT PUROHIT]

D/ SIRS

W.E.F 01/04/2011, SERVICE TAX  ONLY ON MAINTAINENCE / MODIFICATION OF  EXISTING CONSTRUCTION  IS ALLOWED.NEW CONTRUCTION IS DISALLOWED.

IF ANY CONSTRUCTION SERVICE WAS RENDERED PRIOR TO THIS DATE, CREDIT IS ALLOWED IRRESPECTIVE OF PAYMENT PENDING.

THNX/ B.B.PUROHIT

[felix ka]

thanks Mr. B Purohit.

all others agree?

AI Summary

Cenvat credit availability limited to maintenance and modification construction services; prior services remain creditable despite pending payment. Cenvat credit for service tax on construction services depends on the nature and timing of the work: maintenance or modification of existing construction qualifies for credit, whereas new construction does not. Services rendered prior to the operative change remain creditable even if payment to the construction contractor is pending; the date of service performance governs eligibility.