Input credit
This query is : Resolved
20 January 2009
We are in the business of construction of mobile towers and renting the same.
We charge service tax on such rent.
We take services from contractors for construction & installation of towers against which they charge service tax on such services.(service tax on works contract)
This would be services for construction of fixed assets.
Now my question is whether we can get input credit on such services?
Also suggest wether we can get input credit for excise duty paid for purchase of capital goods.
We charge service tax on such rent.
We take services from contractors for construction & installation of towers against which they charge service tax on such services.(service tax on works contract)
This would be services for construction of fixed assets.
Now my question is whether we can get input credit on such services?
Also suggest wether we can get input credit for excise duty paid for purchase of capital goods.
22 January 2009
The cenvat credit is available for inputs used in providing the service. However the ST would have to be paid on the entire value including materials @ 12.36 % for you to be able to claim the cenvat credit of materials.
23 January 2009
Thank Mr. Madhukar,
BUT
The material are not input material, they are capital assets which we rent out.
Hence my question stands whether we can take credit of service tax paid for services used in construction of capital goods. This capital assets are rented out and its a source of income to the company which is taxable.
BUT
The material are not input material, they are capital assets which we rent out.
Hence my question stands whether we can take credit of service tax paid for services used in construction of capital goods. This capital assets are rented out and its a source of income to the company which is taxable.
24 January 2009
Dear Shashank,
As per given facts, lets solve the problem step by step:-
(1)First of all, you are not a manufacturer as the construction of immovable property does not amount to manufacture. Hence, you can not claim the cenvat on inputs or input services used in construction of towers.
(2)You are a service provider.
(2)(i) Now, the constructed towers are not covered by the definition of "capital goods" prescribed under rule 2(a) of CENVAT Rules, 2004.
(2) (ii) However, the input services used in constraction of towers can be covered by the definition of "Input Services" prescribed under rule 2(l) of CENVAT Rules, 2004,if you establish that this input services are used in providing of services or are included by the inclusive part of the above definition.
(refer Rule 2(l)of CENVAT Rules, 2004)
With best wishes
for any clarification, please mail me at
amarpal@icai.org
As per given facts, lets solve the problem step by step:-
(1)First of all, you are not a manufacturer as the construction of immovable property does not amount to manufacture. Hence, you can not claim the cenvat on inputs or input services used in construction of towers.
(2)You are a service provider.
(2)(i) Now, the constructed towers are not covered by the definition of "capital goods" prescribed under rule 2(a) of CENVAT Rules, 2004.
(2) (ii) However, the input services used in constraction of towers can be covered by the definition of "Input Services" prescribed under rule 2(l) of CENVAT Rules, 2004,if you establish that this input services are used in providing of services or are included by the inclusive part of the above definition.
(refer Rule 2(l)of CENVAT Rules, 2004)
With best wishes
for any clarification, please mail me at
amarpal@icai.org
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Is this income indian or foreign income?
- REGARDING GST ON COMMERICIAL PROPERTY
- 15ca /15cb whose income tax login? remitter or nri seller's login?
- Regarding Documentation & Compliances for Opening of Unit of Pvt Ltd.
- GST on export of services and Input Credit
- TDS U/S. 194NF
- RCM applicability on Rent Paid by Registered Person to Unregistered Landlord for Residental Building
- ITC temporary reversal and reclaim
- Applicable TDS rate for sale of property in Nov 2024
- GST rate for millets.
- Short and Excess provision of expenses
- Issue of gst e invoice
- Interchangeable words in accounts
- Adjusted profit/Loss in the case of LLP and Pvt. Ltd.company
- How to adjusted advances given or receipt
- Foreign vendor without PAN unable to to register due to non receipt of OTP on foreign number ?
- 133(6) DIN INVALID format error - ->WHERE TO REPLY 133(6) notice?
- Query for dubts
- Regarding Resignation by Auditor from Pvt. Ltd.
- Regarding einvoice taken on nil rated sales
Trending Online Classes
CAclubindia
