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Service Tax credit on retention Amount

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Ours a manufacturing company taking cenvat credit on service tax paid on works contract services. While releasing the payment some amount retained as retention against any faulty works.(% on contract price.).

Suppose Rs 1000 is the contract price.

Billing done as:-                          

Basic-                            1000

ST @ 10.3%                     103

Please advise how much we will take credit (If we are releasing the payment 90% of contract price i:e Rs 900 )                                       

Replies (2)

 

you can take 90 % input credit… 103*90/100 = 92.70

Whether this will be affected by the recent changes in Service tax Budget 2011. As service tax is payable on due or payment which ever is erlier basis.


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