service tax credit on drawing-reg, Service Tax

[Ramakrishnan Seshadri]

Dear Sir,

We are constructing one building in our factory.

The Builder has submitted a bill for drawing plan towards construction of building by charging service tax in his bill.

Our question is whether we can take service tax credit for this .

Could experts please clarify as the credit value is more whether we can take credit or not.

Matter urgent.

Thanks & Regards,

S.Ramakrishnan

Posts / Replies

[Mahir S]

Sir,

The service provider who constructs the factory building will charge service tax for rendering works contract service/construction service. Therefore you have to pay service tax. But Rule 2 (l) of Cenvat Credit Rules, 2004 defines "input Services” and this definition excludes "service portion in the execution of a works contract and construction services including service listed under clause (b) of section 66 E of the Finance Act.

Also, as the phrase 'setting up" of factory has been removed from the definition of input services, therefore no service tax credit would be available on such services to you.