Input ST Credit

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

17 March 2010 Dear All

we can able to take credit of services tax on Factory Building Repair & maintannace & fabrication work also

Pragnesh

Pragnesh (Expert)
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19 March 2010 Its depend upon which type of service you are providing against you are seeking cenvat credit. Might be you can.

Querist : Anonymous

Querist : Anonymous (Querist)

20 March 2010 Dear Pragnesh sir

we can not able to take any credit in the cases of Factory Building , Its right ?

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Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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01 August 2024 Under the Service Tax regime, the eligibility to claim input credit on services is governed by the Cenvat Credit Rules, 2004. Here’s a breakdown of how credit can be claimed for various types of expenses related to factory buildings:

### **1. Credit on Factory Building Repairs and Maintenance**

**Eligible Services:**
- **Repair and Maintenance:** You can claim Service Tax credit on services related to the repair and maintenance of a factory building. This is because repair and maintenance services are considered input services if they are used for providing output services or in the course of manufacture of goods.

**Key Points:**
- The repair and maintenance services must be directly related to the manufacturing process or the provision of output services.
- Ensure that the service invoices are properly documented and include Service Tax charged.

**Examples:**
- If you engage a contractor for repairing the factory's roof or machinery within the factory, the Service Tax on these services can be claimed as input credit.

### **2. Credit on Fabrication Work**

**Eligible Services:**
- **Fabrication Work:** Service Tax credit can be claimed on fabrication work if it is directly used in the manufacture of goods. Fabrication services that modify or enhance the manufacturing facility are eligible for input credit.

**Key Points:**
- The fabrication work should be directly linked to the production process.
- Verify that the service invoices clearly specify the nature of work and the Service Tax charged.

**Examples:**
- Fabricating machinery parts or installing new equipment in the factory would qualify for input credit if they are used in the manufacturing process.

### **3. Credit on Factory Building Construction**

**Not Eligible:**
- **Construction of Factory Building:** Service Tax credit is generally not available for the construction of factory buildings or new construction projects. This includes expenses related to the initial construction or major structural changes to factory buildings.

**Reason:**
- The construction of factory buildings is considered a capital expenditure rather than an input service. The Service Tax on such capital goods or construction activities is not eligible for input credit.

**Key Points:**
- Construction services for new buildings or major alterations are excluded from the input credit.
- The rationale is that the benefit of construction services is not directly tied to the manufacture of goods or provision of taxable services in the same way as repair or maintenance services.

**Examples:**
- Service Tax paid on the construction of a new factory building or on major renovations to an existing factory building cannot be claimed as input credit.

### **Summary**

- **Factory Building Repairs and Maintenance:** Eligible for input Service Tax credit if related to manufacturing or provision of output services.
- **Fabrication Work:** Eligible for input Service Tax credit if directly related to manufacturing processes.
- **Factory Building Construction:** Not eligible for input Service Tax credit.

For precise application to your case, especially given that tax laws can be subject to changes and local interpretations, consulting with a tax advisor or professional would be prudent. They can provide guidance based on the specific circumstances and ensure compliance with the current regulations.