Service tax credit on factory construction by renting of ip

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

20 September 2012 We have constructed a Factory Building PFB and now we want to give this factory building (immovable property)on lease to other unit
Can we take Service tax Credit?
The amount of S.Tax is Rs.10 lacs ,please guide .Is there any other way out to utilize this credit.?

CA CS Amit S. Kedia

CA CS Amit S. Kedia (Expert)
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20 September 2012 No, Cenvat credit of input service is allowed, it is not inout service for the purpose of output service(Rent Income).

CA CS Amit S. Kedia

CA CS Amit S. Kedia (Expert)
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20 September 2012 No, Cenvat credit of input service is allowed, it is not inout service for the purpose of output service(Rent Income).

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CA CS Amit S. Kedia

CA CS Amit S. Kedia (Expert)
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20 September 2012 Please read Master Circular No. 96/7/2007-S.T., dated 23.8.2007from C.B.E&C. as amended by Circular No.98/1/2008-S.T., dated 4.1.2008-
"Input credit of service tax can be taken only if theoutput is a ‘service’ liable to service tax or a ‘goods’ liable to excise duty. Since immovable property is neither ‘service’ or ‘goods’ as referred
to above, input credit cannot be taken".

Querist : Anonymous

Querist : Anonymous (Querist)

20 September 2012 thanks for the reply.but renting the immovable property is output service for leasing ?

CA CS Amit S. Kedia

CA CS Amit S. Kedia (Expert)
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20 September 2012 Renting is output service but immovable property is not an outout service. Hence,Cenvat credit of input service of construction service is not avaialable

Querist : Anonymous

Querist : Anonymous (Querist)

13 October 2012 thanks Dear Amit but there is case law of mall(himalaya)where Gujrat HC allowed such credit.
Plus i have search at CAclub it self where i got a article giving favour to take crdit.

Querist : Anonymous

Querist : Anonymous (Querist)

13 October 2012 plus PFB is not immovable property as decided in case law. Thats why i think there is no harm to take credit plz guide me.

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