Regional Advisory Committee - Minutes of RAC Meeting of Salem Commissionerate (Extracts) - Service Tax - Circular

Regional Advisory Committee - Minutes of RAC Meeting of Salem Commissionerate (Extracts) The Second meeting of the Regional Advisory Committee for Organized Sector, Small Scale Sector and the Service Sector for the block years 2009 2010 was held on 25-6-2009 at 11.30 hrs. in the Conference Hall of the Commissionerate Building at No. 01, Foulks Compound, Anai Medu, Salem-01. Shri. C.P. Rao, Chairman and Commissioner of Central Excise, Salem was in the Chair. The following members and Departmental Officers attended the meeting. The following members from the trade and industry have attended the meeting: * * * * * At the outset, the chairman welcomed the members for the R.A.C. Meeting and took up the points sponsored by members for discussion as detailed below: Points raised by federation of all trade and industry associations of Erode district Point No. I : Exemption limit of Rs. 10.00 lakhs now available for all service sector should be extended to Goods Transport service category also: Reply : Chairman pointed out that this is a policy matter and can be taken up with the Board. Point No. 2 : Interest claim on refund for the taxes pre-deposited at the time of appeal in service tax. Since Section 35F of the Central Excise Act will not permit the claim of interest: Reply : Interest on delayed refund of amount deposited under the proviso to Section 35F of the Central Excise Act, 1944 is permissible under Section 35FF of the Central Excise Act, 1944 , with effect from 16-5-2008, as the same was inserted in (sic) (by) the Finance Bill, 2008 . Point No. 3 : Service tax on Installation and commissioning of Renewable energy plants may be exempted for encouraging its usage: Reply: Since this is a policy matter, the same can be taken up with the Board. Point No. 4 : Works Contract: As per Rule 3(2) of 2007 of the works contract (Composition Scheme for payment of service tax), the taxable service provider opting to pay under composition scheme is not entitled to take Cenvat Credit of duty on inputs used in or in relation to the said works contract. But he should be permitted to claim Cenvat credit of duty paid on capital goods purchased for the said contract and also service tax paid on input services Reply : Rule 3(2) of the Works Contract (Composition Scheme for payment of Service Tax) Rules, 2007 states that '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 provision of CENVAT Credit Rules, 2004' . There is no restriction on availing Cenvat credit on the input services or captial goods under Works Contract (Composition Scheme for payment of Service Tax) Rules, 2007. The same has been clarified by the Ministry vide TRU Circular No. 96/7/2007-ST., dated 23-8-2007 vide reference code No. 097.01/23-8-07. * * * * Point No. 10 : Cenvat credit for the 'Capital goods' purchased in previous financial year i.e. in 2008-09, and failed to claim in the same year can be allowed to avail in the current year i.e. in 2009-10: Reply : The Cenvat credit on capital goods can be taken as per Rule 4(2)(a) of Cenvat Credit Rules, 2002 which states that "The CENVAT credit in respect of capital goods received in a factory or in the premises of the provider of output service at any point of time in a given financial year shall be taken only for an amount not exceeding fifty per cent o the duty paid on such capital goods in the same financial year". The Chairman impressed upon the RAC members not to raise the issues relating to policy matters. In case of any issue requiring a clarification, the same can be addressed to the D.C. (Service Tax) or D.C. (Tech), Hqrs. The meeting concluded with vote of thanks by the Additional Commissioner. This is issued with the approval of the Commissioner. [Commissioner of Customs, Central Excise and Service Tax, Salem, Minutes of RAC Meeting held on 25-6-2009]