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TMI Blogservice tax set off against civil contstructionX X X X Extracts X X X X X X X X Extracts X X X X ..... we are manufacturer of excisable goods. we have received purchase order under works contracts for Civil Construction works. we have completed civil construction works through another vendor. we have received Civil Construction bill with charging service tax. Can we utilize this service tax amount against payment of excise duty? - Reply By Rajagopalan Ranganathan - The Reply = Sir, Man ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ufacturing excisable goods and undertaking civil construction work are two independent stream of business. Therefore service tax paid by you in respect of civil construction cannot be utilized for payment of excise duty on your manufactured products. This is my opinion. - Reply By Ganeshan Kalyani - The Reply = The input should have been used in or in relation to manufacturing of excisable good ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, then only the credit on the input becomes eligible subject to conditions. Hence the credit in your case is not eligible. - Reply By KASTURI SETHI - The Reply = Sh.Ganeshan Kalyani Ji, Sir, Will you please like to go through Rule 2(k) (B) of Cenvat Credit Rules, 2004 especially the clause below ((a) and (b) except for the provision of service portion-------------------------clause (b) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Section 66 E of the Act. ? I think it is worth reading before arriving at final opinion. Pl. respond back for enrichment of my knowledge. With bundles of thanks. - Reply By Rajagopalan Ranganathan - The Reply = Sir, The question is whether a manufacturer of excisable goods who undertakes works contract for civil construction work executed by another person on behalf of the manufact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urer can avail the credit of service tax paid on the services provided by the another person. In my opinion service tax paid for the work contract service is in no way connected with the manufacturing of excisable goods by manufacturer. As per rule 2 (l) of Cenvat Credit Rules, 2004 input service means any service, - (i) used by a provider of output service for providing an output se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rvice; or (ii) used by a manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and clearance of final products upto the place of removal. In view of the above since the works contract service is not utilised in relation to manufacture of excisable goods, service tax paid on works contract service (even if it is on service portion) is not availab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le as credit. Moreover setting up of a factory is excluded from the inclusive definition of input service under rule 2 (l) of Cenvat Credit Rules, 2004 . Therefore as already expressed by me the service tax paid in respect of works contract service for civil construction is not eligible as credit. - Reply By KASTURI SETHI - The Reply = Sh.Rajagopalan Ranganathan Ji Thanks a million ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sir. Now I fully agree with you and Sh.Ganeshan Kalyani Sir. - Reply By KASTURI SETHI - The Reply = Sir, Whenever any expert (including me) after posting reply to a query, writes 'it is my opinion', I infer that such words either put a question mark on 100% accuracy of reply or the issue is debatable. - Reply By Ganeshan Kalyani - The Reply = Thanks Kasturi Sir. Sir I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have observed that there is sea of case laws. And on one particular issue there is favourable case law as well as unfavourable. Therefore it becomes essential for us to mention as 'in my opinion' in the reply. - Reply By KASTURI SETHI - The Reply = Sh.Ganeshan Kalyani Ji, I am convinced with your reasoning on in my opinion . To express views on controversial issue is an a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cid test for an expert and hence it is fantastic. - service tax set off against civil contstruction - Query Started By: - Dayanand Mane Dated:- 2-1-2016 Service Tax - Got 8 Replies - Service Tax - Discussion Forum - Knowledge Sharing, reply post by an expert, personal opinion Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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