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Cenvat on service rendered during redevlopment

CA Shraddha Vora (Teamhead) (149 Points)

15 November 2013

Dear ALl, Please guide me on the following: A builder redevelops a slum for which he gets an FSI. He makes a temporary building which he provides for the slum developers to live in, till their flats in the redeveloped building are ready. He receives input services for the construction of this temporary building as final flats for slum developers. Can such CENVAT be availed?

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5 Replies

Ankit (CA, CS) (3064 Points)
Replied 15 November 2013

Dear Shraddha, According to me, the credit should be allowed since the same is for providing the final output services - Ankit

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CA Shraddha Vora (Teamhead) (149 Points)
Replied 15 November 2013

Dear Sir,

In that case, will the TDR received be taxable? and on what amount?

Ankit (CA, CS) (3064 Points)
Replied 15 November 2013

are you talking about the TDR consideration received from the builder??

CA Shraddha Vora (Teamhead) (149 Points)
Replied 15 November 2013

Yes. Because according to Circular 151/2012 service of construction provided to the society / dwellers of slum is taxable w.e.f. 1.7.2012. If the same is taxable then CENVAT may be allowed, but in absence of the same, i.e. where it is not taxable, the officer may contend that to that extent, no CENVAT allowed where there in no immediate output service.