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Issue ID: 4819
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Availment of Cenvat Credit-reg

Date 15 Oct 2012
Replies3 Replies
Views 1303 Views
Cenvat credit availability depends on whether works contract service qualifies as input service and has nexus to taxable output.
Cenvat credit of service tax on composite works contract depends on whether the received services qualify as input services and satisfy the statutory nexus to a taxable output. Works contract service may be admissible for a mining company's taxable output if nexus is established, but specified construction activities-construction of buildings or civil structures and laying foundations or supports for capital goods-are expressly excluded from credit. (AI Summary)

Sir,

We are in process of submitting offer for  Design & Engineering, Shaft Construction & Furnishing, Supply of Equipments, Civil Structural Architectural Work, Erection, Installation, Testing & Commissioning including Maintenance during the Warranty period  to Various Mines Company.

If we charge the Service tax @ 12.36% on 40% value of Total Contract Value as per rule 2A .of Service tax rule,  Will the customer able to take Cenvat Credit ?.  Pl clarify

Regards

N.Balachandran

 

 

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