Input of service tax, Service Tax

[SUMAN JHA]

Our company has issued Composite as well as Divisible Civil contracts.While processng the bills of contractors for payment we insists for two things-the contractor should have claimed ST in the bill & contractor should have ST registration.If the contractor fails to satisfy any one of these two things, we hold the payment of ST.Is it the right way? If we hold the ST in above discussed circumstances, can we book the ST under Cenvatable ST & claim the credit in ST return ?

Posts / Replies

[V Ramanujam]

Wherever the Service tax is claimed, the same should be displayed in the bill along with Service tax Registratio No. Hence, you are right in not making the payment of service tax to the vendor if the bill is not in the format. As regards availing of CENVAT Credit by you, it depends on the purpose for which premises covered in the civil contract is used. If the premises is used for rendering output service, the CENVAT credit on input services can be availed. However,CBEC clarified if the premise is used for 'renting', then CENVAT on input service of construction/works contract service cannot be availed.