Construction of Hotel started in the year 2007-08. Wherein the company incurred various expenditure relating to construction. Major portion of the expenses are payment made project consultant, architect and contractor.
All the above parties have issued service invoice.
Company had taken registration under the service tax act in the year 2007 under the category GTA and Business Auxilliary Service (as it was receipient of Transport service and Business Auxiliary Service import)
Construction was completed in the year Feb 2010 and at the time of completion all the expenses were capitalised and credit pertaining to same was claimed by the assessee. (architect fees, project consultation fees and contractor payments)
Now during the service tax audit the auditor is denying the credit on inputs service stated above as according to him the said services are not pertaining to services which are provided by the hotel.
My question is will the input credit on the said services will be allowed and would like to know if there are any case laws pertaining to same
06 April 2013
Pl. clarify further: Why did you avail Cenvat of all the 'Input Services'? Was any of your Output Service, taxable at that time? Hotel Accomodation service became taxable in the year 2011. Secondly, on reverse charge payment through Cenvat is not admissible.
08 April 2013
Cenvat of all input service were availed by the assessee at the time when the hotel was capitalised and the hotel started providing services.
Architect fees etc are not directly related to the services which the hotel is providing and the input services was received by the hotel at the time when there were no other services being provided i.e the hotel was in construction phase.
I was just trying to understand if by any chance the inout credit will be allowed to be claimed by any chance.
Whereas reverse charge payment was done through cash only.
CAclubindia
