Ajay s (Accounts Officer) (243 Points)
21 March 2011Dear Sir
We are doing a job under works contract . At present we are under excise excemption. Now we supplied a machine to the client and we paid customs duty of 200000/- for that machine? My question is whether we can take this duty as input credit in service tax ???
Pankaj Arora
(Learner)
(3134 Points)
Replied 21 March 2011
you can not take input of custom duty if you take than you could not take service tax exemption you have to charge service tax on your billing when you take input of custom duty....
Ajay s
(Accounts Officer)
(243 Points)
Replied 21 March 2011
The answer is not clear pankaj. please explain why i cant take the credit
Dilip Darji
(392 Points)
Replied 21 March 2011
Mr.Ajay.
Your question is not clear.
Please give your correct query.
DILIP DARJI.
Ajay s
(Accounts Officer)
(243 Points)
Replied 21 March 2011
Mr.Dilip
Am talking about service tax. Is it possible to adjust the duty paid againt service tax payable?
Dilip Darji
(392 Points)
Replied 21 March 2011
Dear Sir.
CENVAT Credit Account is a pool of credit availed by you towards, Input, input Services and Capital Goods. The balance lying in your CENVAT Account can be used towards payment of Excise duty and Service Tax (Not Custom Duty.
But excise duty payment made towards removal of excisable goods, cannot be adjusted towards payment of Service Tax, for the reason that Accounting Codes for Excise duty, Service Tax and Custom duty are different.
Regards.
DILIP DARJI,
U S Sharma
(glidor@gmail.com)
(21063 Points)
Replied 21 March 2011
| Originally posted by : Ajay s | ||
 |
Dear Sir We are doing a job under works contract . At present we are under excise excemption. Now we supplied a machine to the client and we paid customs duty of Rs.200000/- for that machine? My question is whether we can take this duty as input credit in service tax ??? |
 |
when u have imported the machine and sold the same ................means the machine is not with you now, then no input credit is available to you.
Ajay s
(Accounts Officer)
(243 Points)
Replied 21 March 2011
Works contract includes supply and labour . So we supplied the machine not sold. So why cant we adjust the credit ?
U S Sharma
(glidor@gmail.com)
(21063 Points)
Replied 28 April 2011
1) you are not registered under central excise, if regustred as as dealer then u had to pass on the CVD amount paid ( not full customs amount) to the actual owner now.
2) the capital goods you dont have in your capital assets so it does not qualify for your capital asset, but u r mere supplier of capital goods,
3) works contract act specify the input used in works contract and capital goods owned by you to perform the works contract makes u eligible for 50% CVD in 1st year and remaining 50% in subsequent years,
4) supply of capital goods does not qualify you to take input credit, here your role is mere a dealer or agent, not the owner of capital goods.
U S Sharma
(glidor@gmail.com)
(21063 Points)
Replied 28 April 2011
Works Contract (Composition Scheme for Payment of Service Tax) Rules, 2007
Rule 1. Short title and commencement –
| (1) | These rules may be called the Works Contract (Composition Scheme for Payment of Service Tax) Rules, 2007. |
| (2) | They shall come into force with effect from the 1st day of June, 2007. |
Rule 2. Definitions –
| (1) | In these rules, unless the context otherwise requires,- | |
| (a) | “Act” means the Finance Act, 1994 (32 of 1994); | |
| (b) | “section” means the section of the Act; | |
| (c) | “works contract service” means services provided in relation to the execution of a works contract referred to in sub-clause (zzzza) of clause (105) of section 65 of the Act; | |
| (d) | words and expressions used in these rules and not defined but defined in the Act shall have the meanings respectively assigned to them in the Act. | |
Rule 3.
| (1) |
Notwithstanding anything contained in section 67 of the Act and rule 2A of the Service (Determination of Value) Rules, 2006, the person liable to pay service tax in relation to works contract service shall have the option to discharge his service tax liability on the works contract service provided or to be provided, instead of paying service tax at the rate specified in section 66 of the Act, by paying an amount equivalent to [Four]1 per cent. of the gross amount charged for the works contract.
|
| (2) | The provider of taxable service shall not take CENVAT credit of duties or cess paid on any inputs, used in or in relation to the said works contract, under the provisions of CENVAT Credit Rules, 2004. |
| (3) | The provider of taxable service who opts to pay service tax under these rules shall exercise such option in respect of a works contract prior to payment of service tax in respect of the said works contract and the option so exercised shall be applicable for the entire works contract and shall not be withdrawn until the completion of the said works contract. |
Superscriptts indicating amendments
1. Substituted vide Notification No. 7/2008 - ST, dated 01-03-2008
(The principal rules were notified vide notification No. 32/2007-Service Tax, dated the 22nd May, 2007)
Ankush Jain
(Partner)
(21 Points)
Replied 09 December 2011
Dear All,
We are in the process of setting up a new industry in Assam. We have to import the machines worth Rs 3.6 crores from Italy & China. Please suggest:
a) Types of duty required to be paid for custom / CVD or any other taxes / duties.
b) For the purpose of calculating Capital Investment on Plant & Machinery, will the custom / cvd or other taxes on machines has to be added to the basic cost of machines?
c) Are electrical installation like transformer / sub - station / generator / panel board, etc included in Capital Investment?
d) Our turnover will be more than 5 crores. If we avail CENVAT do we need to pay the difference of excise duty resulting out of turnover.
Please advice.....
Dinesh Y L
(Accounts Exicutive)
(35 Points)
Replied 20 February 2012
Dear All,
We are imported some scanners and at the time of import we have pair customs duty @ Rs12+ lakhs.
My query is that we can take any input tax in the customs duty whic we have paid?
CAclubindia
