Credit taken on 75% in labor contractor

[Lok B. Chand]

Percentage of Service Tax payble by the person receiving the Service can take the credit on it.

[Vijay kumar]

Dear Sir, the question is not clear. From the query, it appears that u r the manufacturer who wants to take credit of the service tax paid by the labour contractor under Manpower supply service. If that is the case, prior to 1.7.2012, you could take full credit of such tax paid. After 1.7.2012, the issue is clarified in the Service Tax Education Guide as follows:

10.1.4 Will the credit of such tax paid be available to the service recipient?
Normally, the credit of the entire tax paid on the service received by the service receiver would be available to the service recipient subject to the provisions of the  Cenvat Credit Rule, 2004. The credit of tax paid by the service provider would be available on the basis of the invoice subject to the conditions specified in the  Cenvat Credit Rule, 2004. The credit
of tax paid by the service recipient under partial reverse charge would be available on the basis on the tax payment challan, again subject to conditions specified in the said Rules.

[Lok B. Chand]

Dear Sir,

Please Clear the following line under Rule -3 in Cenvat Credit Rule, 2004

Provided that if the amount so calculated is less than the amount equal to the duty leviable on transaction value, the amount to be paid shall be equal to the duty leviable on transaction value.]

Dear sir, please clear the above lines are applicable after 10 year i.e. 40 quarter or below 10 year i.e. from the date of taking the CENVAT credit.

AI Summary

Credit for Service Tax by Labor Contractors: Rule 3, Cenvat Credit Rules 2004 Conditions Post-July 1, 2012 A discussion on a forum involves a query about taking credit for service tax paid by a labor contractor under Manpower supply service. Initially, full credit was available before July 1, 2012. Post this date, credit is subject to conditions outlined in the Cenvat Credit Rule, 2004. The first respondent clarifies that credit is available based on invoices and tax payment challans, adhering to these rules. The second respondent seeks clarification on a specific provision in Rule 3 of the Cenvat Credit Rule, 2004, regarding its applicability over time in relation to the duty on transaction value.