Input
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
03 January 2014
An LLP is in the business of Construction of Residential complex so:
1. Can it pay ST on Receipt Basis???
2. Can it take input of ST paid on Architect Fees, Consultancy and other services ????
Reply Asap
1. Can it pay ST on Receipt Basis???
2. Can it take input of ST paid on Architect Fees, Consultancy and other services ????
Reply Asap
03 January 2014
sir your service tax liablity arise as pot 2011 basis, st paid on receipt basis only when your preceding year turnover is not more then 50 lakhs (it means if your preceding year turnover is less the 50 lakhs then you pay your current year service tax liability receipt basis upto 50 lakhs rs. turnover,
and second point is you get cenvat credit on archeitect fees, consultancy and other service fees which paid by you
and second point is you get cenvat credit on archeitect fees, consultancy and other service fees which paid by you
03 January 2014
Answer to your query:
1.Service Tax can be paid on receipt base in case of partnership firms
If P.Y Aggregate Value of Taxable Service <50 lakh
Then
C.Y Aggregate Value of Taxable Service upto 50 lakh taxable on receipt basis
Reference:Proviso to Rule 6(1).
2.Yes,it can take cenvat credit of input services like architect fees,Consultancy service.
1.Service Tax can be paid on receipt base in case of partnership firms
If P.Y Aggregate Value of Taxable Service <50 lakh
Then
C.Y Aggregate Value of Taxable Service upto 50 lakh taxable on receipt basis
Reference:Proviso to Rule 6(1).
2.Yes,it can take cenvat credit of input services like architect fees,Consultancy service.
03 January 2014
Not only partner ship firm LLP is alsi covered above provision
03 January 2014
Sir LLP is also covered.I never denied that.
Querist : Anonymous
Querist :
Anonymous
(Querist)
04 January 2014
Can u tell me where it is written than Input can be taken ???
Because i have heard that Input of Architect fees is not allowed.
Because i have heard that Input of Architect fees is not allowed.
01 August 2024
Here’s a detailed response to your questions about Service Tax (ST) and the ability to claim input credits:
### 1. **Service Tax on Receipt Basis**
In the context of construction services, the Service Tax is typically paid on the basis of **"Receipt" or "Invoice" basis**, depending on the service provider’s choice and compliance with the applicable rules. However, with the introduction of the Goods and Services Tax (GST) from July 1, 2017, Service Tax has been subsumed under GST, and the rules around the payment and receipt of taxes have evolved.
For **pre-GST Service Tax**, the rules were:
- **Receipt Basis**: Service Tax could be paid based on the receipt of payment.
- **Invoice Basis**: Alternatively, it could be paid based on the issuance of the invoice.
For GST:
- Under the **Goods and Services Tax** regime, construction services are subject to GST. The tax is generally required to be paid on the **invoice basis**, meaning that tax is to be paid based on the date of invoice issued rather than the receipt of payment.
### 2. **Input Tax Credit (ITC) on Architect Fees, Consultancy, and Other Services**
**Under Service Tax:**
- **Input Tax Credit** was not fully available for construction services and related input services. Specific restrictions applied, including that credit could not be claimed for certain services like architect fees.
**Under GST:**
- **Architect Fees and Other Professional Services**: Under GST, the ability to claim Input Tax Credit (ITC) has been enhanced compared to the Service Tax regime. As per the **CGST Act** and **Rules**, ITC is allowed on inputs, input services, and capital goods used in the course of business, including:
- **Architect Fees**: ITC can generally be claimed on architect services if these services are used for the construction of commercial properties or for providing taxable services.
- **Consultancy and Other Services**: ITC can be claimed on consultancy services if they are used in the course of business or in the making of taxable supplies.
However, there are specific provisions and conditions for claiming ITC:
- **Section 17(5)** of the CGST Act lists certain items on which ITC is blocked, such as for the construction of immovable property for personal use.
- **Rule 37** of the CGST Rules specifies conditions for claiming ITC, including the requirement to be in possession of a valid tax invoice and the service being used for business purposes.
### **Where It Is Written**
For GST input credit, you can refer to:
- **Section 16** of the CGST Act, which provides the general provisions for claiming ITC.
- **Section 17(5)** of the CGST Act, which details the restrictions on ITC.
- **CGST Rules** (specifically Rules 36 to 39) for detailed procedures on claiming ITC and maintaining records.
For a construction business, ensure that:
- All services used in the construction project are eligible for ITC.
- You maintain proper documentation, including invoices and receipts.
- Check the latest updates on the GST portal or consult with a tax advisor for any recent changes or specific issues related to your business.
### **Summary**
- **Service Tax** (pre-GST): Payable on the basis of receipt or invoice; input credits were restricted.
- **GST**: Input credits on architect fees and consultancy services are generally allowed if used for taxable supplies. Ensure compliance with the conditions specified in the CGST Act and Rules.
For the most current and detailed guidance, particularly if you are dealing with GST, consulting a professional tax advisor or checking the latest updates on the GST portal would be advisable.
### 1. **Service Tax on Receipt Basis**
In the context of construction services, the Service Tax is typically paid on the basis of **"Receipt" or "Invoice" basis**, depending on the service provider’s choice and compliance with the applicable rules. However, with the introduction of the Goods and Services Tax (GST) from July 1, 2017, Service Tax has been subsumed under GST, and the rules around the payment and receipt of taxes have evolved.
For **pre-GST Service Tax**, the rules were:
- **Receipt Basis**: Service Tax could be paid based on the receipt of payment.
- **Invoice Basis**: Alternatively, it could be paid based on the issuance of the invoice.
For GST:
- Under the **Goods and Services Tax** regime, construction services are subject to GST. The tax is generally required to be paid on the **invoice basis**, meaning that tax is to be paid based on the date of invoice issued rather than the receipt of payment.
### 2. **Input Tax Credit (ITC) on Architect Fees, Consultancy, and Other Services**
**Under Service Tax:**
- **Input Tax Credit** was not fully available for construction services and related input services. Specific restrictions applied, including that credit could not be claimed for certain services like architect fees.
**Under GST:**
- **Architect Fees and Other Professional Services**: Under GST, the ability to claim Input Tax Credit (ITC) has been enhanced compared to the Service Tax regime. As per the **CGST Act** and **Rules**, ITC is allowed on inputs, input services, and capital goods used in the course of business, including:
- **Architect Fees**: ITC can generally be claimed on architect services if these services are used for the construction of commercial properties or for providing taxable services.
- **Consultancy and Other Services**: ITC can be claimed on consultancy services if they are used in the course of business or in the making of taxable supplies.
However, there are specific provisions and conditions for claiming ITC:
- **Section 17(5)** of the CGST Act lists certain items on which ITC is blocked, such as for the construction of immovable property for personal use.
- **Rule 37** of the CGST Rules specifies conditions for claiming ITC, including the requirement to be in possession of a valid tax invoice and the service being used for business purposes.
### **Where It Is Written**
For GST input credit, you can refer to:
- **Section 16** of the CGST Act, which provides the general provisions for claiming ITC.
- **Section 17(5)** of the CGST Act, which details the restrictions on ITC.
- **CGST Rules** (specifically Rules 36 to 39) for detailed procedures on claiming ITC and maintaining records.
For a construction business, ensure that:
- All services used in the construction project are eligible for ITC.
- You maintain proper documentation, including invoices and receipts.
- Check the latest updates on the GST portal or consult with a tax advisor for any recent changes or specific issues related to your business.
### **Summary**
- **Service Tax** (pre-GST): Payable on the basis of receipt or invoice; input credits were restricted.
- **GST**: Input credits on architect fees and consultancy services are generally allowed if used for taxable supplies. Ensure compliance with the conditions specified in the CGST Act and Rules.
For the most current and detailed guidance, particularly if you are dealing with GST, consulting a professional tax advisor or checking the latest updates on the GST portal would be advisable.
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