11 January 2013
Under Composition Scheme can a Service Receiver who has taken services from Service Provider who has opted for Composition Scheme take credit of service tax paid to service Provider.
Yes the Service Recipient can avail the credit of tax only to that extent. For your reference I am giving the the extract of Rule 3(2A)of Works Contract ( Composition Scheme) Rules,2007 2a[(2A) The CENVAT credit of tax paid on taxable services as referred to under sub-clauses (zzd), (zzq) and (zzzh) of clause (105) of section 65 of the Finance Act, 1994, shall be available only to the extent of 40% of the service tax paid when such tax has been paid on the full value of the service after availing CENVAT credit on inputs.]
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