CENVAT Credit on Inputs under Works Contract Service

This query is : Resolved

CA FARHAD ASPI SHROFF (Querist)
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05 March 2010 Respected Sir/Mam,

One company is registered under works contract service and pays service tax @ 10.30% on services portion only. So, it takes credit of input services and capital goods. While execution of work, it uses certain materials which it imports and pays Basic customs duty, CVD & SAD on it.

My doubt is as that company is not taking benefit of composition scheme, so whether it can take CENVAT Credit of CVD (equal to excise duty) paid on such materials/inputs.

Please reply ASAP.

Thanks.

SIDDHARTHA SANKAR ROY

SIDDHARTHA SANKAR ROY (Expert)
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07 March 2010 Your query seems confusing. Assessees under WCS who pay as per Rule 2A of Service Tax(Determination of Value) Rules, 2006 i.e, only of service part are not allowed to take CENVAT credit atall.

Assessees opting to pay service tax under compostion scheme are allowed to take credit on CG & IS but not on Input. CVD paid on CG is eligible for credit.