CENVAT Credit on Design Services, Service Tax

[Rakesh K Paliwal]

Dear Experts,

pl let me know about CENVAT credit eligibale or not on " Design Service" provided to manufacturer, for the purpose of Design of Structure of  New plant.

Regards

Rakesh K Paliwal

Posts / Replies

[Ankit Gupta]

Yes you can avail the credit.

Ankit

Ankitguptatax at the rate of yahoo.com

[Ashok Jogalekar]

Before the notification no. 3/2011-CE(NT) dated 1.3.2011 the definition of input service in cenvat credit rule 2 allowed CENVAT of setting up plant, which was eliminated after the above notification.

So, as per the CENVAT credit rules when you can not avail credit for setting up then no question of availing credit for services of design used in setting up of new plant.

[Ankit Gupta]

I would like to draw your kind attention to exclusive part of definition of Input Service which excludes only Work contract Service and Construction service in relation to

laying of foundation or making of structures for support of capital goods,

  Further, the design service is not excluded and the said service is covered in means part of the definition.

[Ashok Jogalekar]

The Design service is in relation to construction of New plant and since setting up is excluded from eligibility for CENVAT credit, the credit of design services will not be available to you.

Further the credit of Design Service will be available to the Work contract Service / Construction service provider and not to you.