OVat & Service Tax on Civil Work (Foundation for machines)

[Bhalchandra Ramdasi]

Respected Sir,

 

We have to do Civil work i.e. foundation for machines for our customer in Orisa. We would like to know :

Whether can we or our customer avail Credit of Input services, input material and Vat Set off ?

Thanks,

[YAGAY andSUN]

From 01-04-2011, CENVAT credit on lying the foudation for capital goods are not allowed.  Even, VAT set up under OVAT Act will not available.

You would have to capitalised the civil work and will have to avail depreciation according to Income Tax Act.

AI Summary

CENVAT Credit and VAT Set-Off Not Allowed for Machine Foundations; Capitalize Civil Work and Claim Depreciation. A query was raised regarding the eligibility for availing credit of input services, input material, and VAT set-off for civil work related to machine foundations in Orisa. The response clarified that from April 1, 2011, CENVAT credit for laying foundations for capital goods is not permitted. Additionally, VAT set-off under the OVAT Act is unavailable. It was advised that the civil work should be capitalized, and depreciation claimed as per the Income Tax Act.