Service tax on works contract
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
02 January 2014
We are providing Annual Maintenace contract of UPS to our customers.
We are unable to bifurcate between component charges and service charges.
Under Service tax can we charge 12.36% on the entire value(100%) of AMC instead of 60% value and take input credit as we have lot of CENVAT credit. Kindly suggest.
Note: For Sales tax under KVAT we are charging VAT on 75% on AMC value.
We are unable to bifurcate between component charges and service charges.
Under Service tax can we charge 12.36% on the entire value(100%) of AMC instead of 60% value and take input credit as we have lot of CENVAT credit. Kindly suggest.
Note: For Sales tax under KVAT we are charging VAT on 75% on AMC value.
02 January 2014
Hi
As per the information above and my understanding
The AMC of UPS would be covered under definition of works contract under sec 65B(54).
Hence service tax valuation rules will apply for determination of value for service tax
n case of works contract service (and also service of construction of residential/commercial flats and buildings), Cenvat Credit of service tax paid on input services and excise duty paid on capital goods will be available.
However, Cenvat credit of input goods is not available - See Sr No. 12 of Notification No. 26/2012-ST dated 20-6-2012
As per the information above and my understanding
The AMC of UPS would be covered under definition of works contract under sec 65B(54).
Hence service tax valuation rules will apply for determination of value for service tax
n case of works contract service (and also service of construction of residential/commercial flats and buildings), Cenvat Credit of service tax paid on input services and excise duty paid on capital goods will be available.
However, Cenvat credit of input goods is not available - See Sr No. 12 of Notification No. 26/2012-ST dated 20-6-2012
02 January 2014
Hence cenvat credit on inputs that is the material bought and used in AMC cannot be availed as credit
02 January 2014
Hence cenvat credit on inputs that is the material bought and used in AMC cannot be availed as credit
02 January 2014
Hence cenvat credit on inputs that is the material bought and used in AMC cannot be availed as credit
02 January 2014
Hence cenvat credit on inputs that is the material bought and used in AMC cannot be availed as credit
Querist : Anonymous
Querist :
Anonymous
(Querist)
03 January 2014
Dear Sir,
Am I eligible to take credit on input service and excise duty on capital goods purchased even if I avail abatement of 40% and charge service tax on 60% Works Contract value.
Am I eligible to take credit on input service and excise duty on capital goods purchased even if I avail abatement of 40% and charge service tax on 60% Works Contract value.
03 January 2014
Yes Sir
You can utilize the cenvat credit in respect of input service and capital goods.As Explanation 2 to Rule 2A(ii) of Valuation Rules prohibits utilization of cenvat credit in respect of INPUTS.
You can utilize the cenvat credit in respect of input service and capital goods.As Explanation 2 to Rule 2A(ii) of Valuation Rules prohibits utilization of cenvat credit in respect of INPUTS.
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