28 July 2010
A firm in service sector has undertaken expansion and modernisation of a part of existing facilities.In this regard the firm, has imported services of consultants abroad,taken bank loans and is constructing buildings.The expansion is not yet complete. The firm continues to render services from the remaining facilities.
Whether the firm can avail/utilise service tax input on the services described above to set of its service tax liability ? Are there any case laws n this regard
28 July 2010
You have mentioned in your querry, that you have imported services of consultants from abroad. Kindly also let us know whether they have actually paid service tax and the same is stated in their Invoice?
29 July 2010
No service tax has not been paid by the consultants,but paid by the importing firm based on reverse charge mechanism .
But the important issue I have raised is the timing of availment/utilisation of service tax input credit .Whether credit can be utilised before comletion of the expansion/commencement of operations or credit has to be availed only after completion of expansion.
CAclubindia
