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Input Service Tax on Bank Charges

Chandrakant Darji (Sr. Accountant) (36 Points)

08 May 2010

Dear sir,

My client is Govt. Contractors for Construction (R & B). He has to give Bank Guarantee to Govt. Now will he avail Input Service Tax on Services of Bank charges paid to bank for Bank Gurantee.

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CA PRAMOD SARAOGI (Chartered Accountant) (1113 Points)
Replied 08 May 2010

Ofcourse , he can take the credit for the service tax paid on the Bank Charges incurred in respect of providing bank guarantee to the Govt. Bank guarantee should be provided in respect of the project on which no abatement is taken and should have a direct nexus with the Output Services namely Construction Services.