Input credit availability
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
11 July 2016
Dear All,
I am a works contractor providing Finishing and completion services( Interiours Nature services) like Installation of marbels (Tilling), carpentary work, Painting,Electrical installation, Plumbing with materials and labours (for all services) . I am charging service tax to my clients on 70% of total works contract value. The following is the list of my revenue and capital nature expenses on which i pay service tax. i want to know about availability of input service tax on the following expenses:-
1. Audit fees paid to chartered accountant.
2. Services tax and vat consultancy fees paid to chartered accountant.
3. Pest control services used at site.
4. House keeping charges used at site and office.
5. Hiring charges used at site.
6. Cleaning and forwarding charges.
7. Security Charges
8. Transportation charges paid to goods transport agency
9. Telephone expenses for site and office
10. Installations charges at factory (capital nature )
11. Repairs and Maintenace of office.
12. Repairs and Maintenace of Factory.
13. Consultancy & design charges for Factory (Capital Nature)
I am a works contractor providing Finishing and completion services( Interiours Nature services) like Installation of marbels (Tilling), carpentary work, Painting,Electrical installation, Plumbing with materials and labours (for all services) . I am charging service tax to my clients on 70% of total works contract value. The following is the list of my revenue and capital nature expenses on which i pay service tax. i want to know about availability of input service tax on the following expenses:-
1. Audit fees paid to chartered accountant.
2. Services tax and vat consultancy fees paid to chartered accountant.
3. Pest control services used at site.
4. House keeping charges used at site and office.
5. Hiring charges used at site.
6. Cleaning and forwarding charges.
7. Security Charges
8. Transportation charges paid to goods transport agency
9. Telephone expenses for site and office
10. Installations charges at factory (capital nature )
11. Repairs and Maintenace of office.
12. Repairs and Maintenace of Factory.
13. Consultancy & design charges for Factory (Capital Nature)
12 July 2016
There is restriction on availment of excise duty charged on inputs for works contractor. No restriction on availment of credit on input service. All mentioned service eligible for credit
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Querist : Anonymous
Querist :
Anonymous
(Querist)
12 July 2016
Thank u Ashishji
please provide a documents regarding input credit.
for the purpose of legally availment of credit.
please provide a documents regarding input credit.
for the purpose of legally availment of credit.
Querist : Anonymous
Querist :
Anonymous
(Querist)
06 August 2016
Dear Sir,
My business nature of transactions also include Trading of goods like material supplied to my client and works contract then above input credit on expenses are eligible as fully or allocate proportionately , Kindly give your suggestions.
My business nature of transactions also include Trading of goods like material supplied to my client and works contract then above input credit on expenses are eligible as fully or allocate proportionately , Kindly give your suggestions.
01 August 2024
In the context of GST (Goods and Services Tax) in India, the eligibility for input tax credit (ITC) on various expenses depends on whether the expense is used for making taxable supplies and whether it aligns with the definitions provided under the GST laws. Here’s a detailed analysis of each type of expense you listed:
### **1. Audit Fees Paid to Chartered Accountant**
- **Eligibility:** Generally, audit fees are not eligible for input credit as they are considered part of compliance and administrative costs.
- **Reference:** GST laws do not specifically cover audit fees under eligible input services.
### **2. Services Tax and VAT Consultancy Fees Paid to Chartered Accountant**
- **Eligibility:** ITC on consultancy fees related to tax and VAT may be eligible if they are used in relation to your business activities.
- **Reference:** Consult the GST rules to verify if these services are directly related to your business.
### **3. Pest Control Services Used at Site**
- **Eligibility:** Pest control services used at the site for construction or maintenance are generally considered eligible input services.
- **Reference:** Under GST, services used in relation to the construction or maintenance of a business property are generally eligible for input credit.
### **4. Housekeeping Charges Used at Site and Office**
- **Eligibility:** Housekeeping services related to your business premises are eligible for ITC.
- **Reference:** Input credit can be claimed for housekeeping services provided they are used in relation to your business.
### **5. Hiring Charges Used at Site**
- **Eligibility:** Hiring charges for labor or machinery used at the site are eligible for ITC.
- **Reference:** Input credit can be claimed on services related to the construction or completion of the works.
### **6. Cleaning and Forwarding Charges**
- **Eligibility:** Cleaning charges related to business premises are eligible for ITC. Forwarding charges may also be eligible if related to the supply of goods.
- **Reference:** GST rules permit input credit on cleaning services if used for business purposes.
### **7. Security Charges**
- **Eligibility:** Security services related to the business premises are eligible for ITC.
- **Reference:** Services used in relation to the security of business premises are eligible for input credit.
### **8. Transportation Charges Paid to Goods Transport Agency**
- **Eligibility:** Transportation services used for the transportation of goods are eligible for ITC if they are used for business purposes.
- **Reference:** ITC is allowed on transportation services used for the supply of goods or services.
### **9. Telephone Expenses for Site and Office**
- **Eligibility:** Telephone expenses are eligible for ITC if they are used in connection with business operations.
- **Reference:** Input credit is available for telephone services used for business purposes.
### **10. Installation Charges at Factory (Capital Nature)**
- **Eligibility:** Installation charges for capital goods are eligible for ITC.
- **Reference:** Input credit can be claimed for installation services related to capital assets.
### **11. Repairs and Maintenance of Office**
- **Eligibility:** Repairs and maintenance services for office premises are eligible for ITC.
- **Reference:** Input credit is available for repairs and maintenance services related to business premises.
### **12. Repairs and Maintenance of Factory**
- **Eligibility:** Repairs and maintenance services for the factory are eligible for ITC.
- **Reference:** Input credit can be claimed for repairs and maintenance of business premises.
### **13. Consultancy & Design Charges for Factory (Capital Nature)**
- **Eligibility:** Consultancy and design services related to capital goods or factory setup are eligible for ITC.
- **Reference:** Input credit can be claimed for consultancy services related to the construction or installation of capital assets.
### **Proportionate Allocation:**
- **Trading and Works Contract:** If your business involves both trading and works contracts, you will need to allocate the input credit between taxable and exempt supplies.
- **Proportionate Credit:** Input credit should be allocated proportionately based on the use of inputs in making taxable supplies versus exempt supplies.
### **Documentation for Input Credit:**
To legally avail input credit, ensure you maintain the following documentation:
- **Invoices:** Valid tax invoices for all expenses.
- **Receipts:** Payment receipts for the services.
- **Contracts:** Agreements or contracts related to the expenses.
- **Proof of Usage:** Evidence showing that the expenses are used for business purposes.
### **Reference Documents:**
- **CGST Act, 2017**
- **Rules under GST (e.g., CGST Rules, SGST Rules)**
- **Notifications and Circulars issued by CBEC or CBIC**
### **Conclusion**
- **Eligible Expenses:** Most of the expenses you listed are eligible for input credit, provided they are used for making taxable supplies and adhere to the GST rules.
- **Proportionate Credit:** If you have mixed supplies, allocate the credit proportionately between taxable and exempt supplies.
- **Consultation:** For detailed guidance and compliance, consult a GST expert or tax consultant.
Maintaining accurate records and ensuring compliance with GST rules will help in maximizing input credit and avoiding potential issues.
### **1. Audit Fees Paid to Chartered Accountant**
- **Eligibility:** Generally, audit fees are not eligible for input credit as they are considered part of compliance and administrative costs.
- **Reference:** GST laws do not specifically cover audit fees under eligible input services.
### **2. Services Tax and VAT Consultancy Fees Paid to Chartered Accountant**
- **Eligibility:** ITC on consultancy fees related to tax and VAT may be eligible if they are used in relation to your business activities.
- **Reference:** Consult the GST rules to verify if these services are directly related to your business.
### **3. Pest Control Services Used at Site**
- **Eligibility:** Pest control services used at the site for construction or maintenance are generally considered eligible input services.
- **Reference:** Under GST, services used in relation to the construction or maintenance of a business property are generally eligible for input credit.
### **4. Housekeeping Charges Used at Site and Office**
- **Eligibility:** Housekeeping services related to your business premises are eligible for ITC.
- **Reference:** Input credit can be claimed for housekeeping services provided they are used in relation to your business.
### **5. Hiring Charges Used at Site**
- **Eligibility:** Hiring charges for labor or machinery used at the site are eligible for ITC.
- **Reference:** Input credit can be claimed on services related to the construction or completion of the works.
### **6. Cleaning and Forwarding Charges**
- **Eligibility:** Cleaning charges related to business premises are eligible for ITC. Forwarding charges may also be eligible if related to the supply of goods.
- **Reference:** GST rules permit input credit on cleaning services if used for business purposes.
### **7. Security Charges**
- **Eligibility:** Security services related to the business premises are eligible for ITC.
- **Reference:** Services used in relation to the security of business premises are eligible for input credit.
### **8. Transportation Charges Paid to Goods Transport Agency**
- **Eligibility:** Transportation services used for the transportation of goods are eligible for ITC if they are used for business purposes.
- **Reference:** ITC is allowed on transportation services used for the supply of goods or services.
### **9. Telephone Expenses for Site and Office**
- **Eligibility:** Telephone expenses are eligible for ITC if they are used in connection with business operations.
- **Reference:** Input credit is available for telephone services used for business purposes.
### **10. Installation Charges at Factory (Capital Nature)**
- **Eligibility:** Installation charges for capital goods are eligible for ITC.
- **Reference:** Input credit can be claimed for installation services related to capital assets.
### **11. Repairs and Maintenance of Office**
- **Eligibility:** Repairs and maintenance services for office premises are eligible for ITC.
- **Reference:** Input credit is available for repairs and maintenance services related to business premises.
### **12. Repairs and Maintenance of Factory**
- **Eligibility:** Repairs and maintenance services for the factory are eligible for ITC.
- **Reference:** Input credit can be claimed for repairs and maintenance of business premises.
### **13. Consultancy & Design Charges for Factory (Capital Nature)**
- **Eligibility:** Consultancy and design services related to capital goods or factory setup are eligible for ITC.
- **Reference:** Input credit can be claimed for consultancy services related to the construction or installation of capital assets.
### **Proportionate Allocation:**
- **Trading and Works Contract:** If your business involves both trading and works contracts, you will need to allocate the input credit between taxable and exempt supplies.
- **Proportionate Credit:** Input credit should be allocated proportionately based on the use of inputs in making taxable supplies versus exempt supplies.
### **Documentation for Input Credit:**
To legally avail input credit, ensure you maintain the following documentation:
- **Invoices:** Valid tax invoices for all expenses.
- **Receipts:** Payment receipts for the services.
- **Contracts:** Agreements or contracts related to the expenses.
- **Proof of Usage:** Evidence showing that the expenses are used for business purposes.
### **Reference Documents:**
- **CGST Act, 2017**
- **Rules under GST (e.g., CGST Rules, SGST Rules)**
- **Notifications and Circulars issued by CBEC or CBIC**
### **Conclusion**
- **Eligible Expenses:** Most of the expenses you listed are eligible for input credit, provided they are used for making taxable supplies and adhere to the GST rules.
- **Proportionate Credit:** If you have mixed supplies, allocate the credit proportionately between taxable and exempt supplies.
- **Consultation:** For detailed guidance and compliance, consult a GST expert or tax consultant.
Maintaining accurate records and ensuring compliance with GST rules will help in maximizing input credit and avoiding potential issues.
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