Cenvat credit of excise duty and service tax

[pankaj sethi]

we have paid excise duty ,service tax on the capital good ,input purcahsed . we are constructing a commercial complex (mall) , Are we entiteled to avail cenvat credit when ever our s tax liabilty will arise ,i e in future .

[sudhir V S]

Dear Mr. Pankaj Sethi, Under construction there are several options available. option I: 12.36% on full consideration - CENVAT credit on inputs, capital goods, input services admisable. Option II: 12.36% on service portion under 12/2003 - CENVAT credit on inputs and Capital goods admisable. Option III: 12.36% on 33% of the consideration under 1/2006 - NO CENVAT admisable. Option IV: 2.06% under works contract -CENVAT on capital goods & input services admisable. Hence if u chose for option I, the credit of inputs, input services and capital goods are always admisable

[Madhukar N Hiregange]

Sudhirs views are correct. The question maybe asked as to how the cement / steel can be used for provding the rental services. To avoid this possible hurdle, the contractor should charge on the gross amount 12.36% and he would be eligible for the credit as long as he is the consigneee of the goods. Buyer can reamin the mall owner.

AI Summary

Cenvat credit entitlement depends on the chosen service charging option; some options allow full credit while one disallows it.
Cenvat credit for inputs, capital goods and input services used in constructing a commercial complex is available or disallowed depending on the service charging option elected: certain options admit full credit on inputs, capital goods and input services; another permits credit on inputs and capital goods; a concessional option disallows Cenvat. Contractors should invoice on the gross amount under the chosen option and be consignee of goods to preserve credit admissibility where material supplies are involved.