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CENVAT and VAT credit on construction material

DHAVAL R. SHAH (SERVICE) (53 Points)

13 September 2008

Hi,

my question is whether the CENVAT and VAT credit is available on Building construction material (Like, CEMENT, steel etc.) . We are in manufacturing unit.

Department is denying the credit on the ground that as they were not input material for producing the final excisable product you can not avail the credit on the same.

Request you to give your views on the same and if possible, plz provide the Rule or notification or case reference for the same.

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6 Replies

salman (ca) (42 Points)
Replied 13 September 2008

In my opinion the final product which is produced by the construction ( say for eg: a building) is not movable and not considered goods.... hence not excisable.

So there is no question of taking cenvat credit on the inputs.

CA Salman. 09339703400

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Smarajit Roychowdhury (Service) (24 Points)
Replied 15 September 2008

As per Govt notifiaction VAT on sale of flat is also applicable now, then why set off on VAT paid on purchase of building materials is not to be considered.

salman (ca) (42 Points)
Replied 15 September 2008

VAT is not applicable.... service tax is applicableon sale of flats.

(Guest)

We are rice exporter and constructing new building and going to erect new plant and machinery. I just want to know that will we be given a credit of input tax on building material for construction and plant & machinery.

And plz also give me list of fixed assets on which vat input can be availed.

chamatkaribaba (Practicing Indirect Tax) (97 Points)
Replied 03 December 2008

Cenvat Credit can be availed on input goods, input services and on capital goods provided they fall under chapter heading as mentioned under Cenvat Credit Rules, 2004.

It depends on whether you can avail cenvat credit of service tax paid on input services. Refer Rule 6(5) of CCR, 2004.