Input Services Credit under Works Contract Service

This query is : Resolved

CA FARHAD ASPI SHROFF (Querist)
Follow

20 February 2010 Dear All,

One company is registered under Works Cont. Service under Composition Scheme. It also sub-contracts part of the contracted work & this sub-contractor is also registered under Works Cont. Service under Composition Scheme.

Question:
1) Whether the company can take credit of service tax paid on bills received from its sub-contractors?

I think it is yes.

Plz clear my doubts.
Thanks

Jigar

Jigar (Expert)
Follow

24 February 2010 Once the company has opted for composition, no input credit is allowed. Composition scheme is floated for the assessees who has not maintained bifurcation and does not intend to indulge in the procedural work. Hence if the company has opted for composition work, no set off on the input credit can be claimed on the bills received from its sub contractor.