We are executing a works contract worth of Rs.1 Cr. We are paying service tax @12.36% after taking abatement of 60% (i.e on 40% value of the work). out of the above said work we have given sub-contract (pure labour work) worth of Rs.20 Laksh. The Sub-Contractor charged service tax @ 12.36% on Rs.20 Lakhs. Now my question is can we eligible to claim CENVAT Credit (Sub-Contractor Service Tax). Other Can we reduce the sub-contractor turnover i.e 20 Laksh from our Turnover Rs.1 Cr. Kindly clarify.
22 October 2012
Under service tax there is no provision to reduce the SC turnover as in VAT. However credit of ST paid by the SC can be availed while payment of 40% is done.
CAclubindia
