TaxTMI 
TaxTMI 
Provisions for availing Input credit
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....rovisions for availing Input credit<br> Query (Issue) Started By: - K Balasubramanian Dated:- 14-9-2006 Last Reply Date:- 18-9-2006 Service Tax<br>Got 2 Replies<br>Service Tax<br>We are rendering commercial and industrial construction services. Out of 10 contracts, in respect of 6 contracts service tax is paid on 100% value. In respect of 4 contracts, we avail 67% abatement (based on notification ....
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....01/2006). What are the restrictions on availing input credit from 01/03/2006?. Please explain in detail as to whether we should avail only the credits which are directly identifiable in respect of 6 contracts or we should avail input credit on a pro rata basis. Reply By Surender Gupta: The Reply: You have various options in Cenvat Credit either to avail 100% credit on cetain input services, or up....
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....to 20% of out put service tax. Which option is best option is to be determined on the basis of actual analyis of facts and circumstances. Reply By Madhukar N Hiregange: The Reply: for the 100% payment of service tax you are eligible for credits as under: Capital goods- used for provding taxable servcies. Once the same are used for taxable servcies the use of the same in my view for those where 67....
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....% exemption is availed SHOULD be available considering the intemtion of leigislature. However the Not1/2006 states that the exemption is not available if credit availed. This is defintie demand.Therefore on CG used commonly there would be a dispute. - Inputs - Those used for services where 100% tax paid would be available. The records for receipt for those projects as well as usage would have to b....
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....e clear. - INput services - those used exclusively for 100% ST paid projects - those used for exempted projects not available. - those used commonly ( 16 enumrated - see Rule 6) -100% available - those used commonly ( other than 16 specified -only to extent used. Costing certificates may provide the break up b/w thsoe used for 100% ST paid and other. Though not asked please examien the possibility....
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.... of using Not.12/2003 instead of 1/2006. You may find that is preferable.<br> Discussion Forum - Knowledge Sharing ....