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service tax input credit on construction on Rain Water Harvesting System, Service Tax

Issue Id: - 111491
Dated: 11-2-2017
service tax input credit on construction on Rain Water Harvesting System

  • Contents

Dear Experts,

Whether we can take service tax credit of construction Rain water harvesting System ? We have book this expenses in our accounts Building Under Construction head. Please advice.

Thanks & Regards

Posts / Replies

Showing Replies 1 to 8 of 8 Records

1 Dated: 11-2-2017
By:- Rajagopalan Ranganathan


According to 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 service; 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 up to the place of removal,

and includes services used in relation to modernisation, renovation or repairs of a factory, premises of provider of output service or an office relating to such factory or premises, advertisement or sales promotion, market research, storage upto the place of removal, procurement of inputs, accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating, share registry, security, business exhibition, legal services, inward transportation of inputs or capital goods and outward transportation up to the place of removal; but excludes,-

(A) service portion in the execution of a works contract and construction services including service listed under clause (b) of section 66E of the Finance Act (hereinafter referred as specified services) in so far as they are used for -

(a) construction or execution of works contract of a building or a civil structure or a part  thereof; or

(b) laying of foundation or making of structures for support of capital goods,

except for the provision of one or more of the specified services.

You have said construction of rain water harvesting system and I infer it is fresh construction. For this if you engage a contractor to execute the construction of the system only then you are eligible to avail the credit. If you engage such service for repairing etc., then you are eligible to take the credit.

2 Dated: 11-2-2017

Well, if it is Statutory Obligation then you may avail the CENVAT credit. Even maintaining Green Area in factory premises according to the Pollution Consent are eligible to avail the CENVAT credit.

3 Dated: 13-2-2017

Dear Experts,

We have build this rain water harvesting system through execution a work contract and pay service tax 40% of value.

Yes, it is the legal requirement for the company.

Please clarify.

Thanks & Regards

4 Dated: 13-2-2017

If it is statutory obligation then you can avail the CENVAT credit.

5 Dated: 14-2-2017

I support the views of M/s. YAGAY AND SUN, experts.

6 Dated: 15-2-2017
By:- Ganeshan Kalyani

I am also of the same views as expressed by my learned experts. Thanks.

7 Dated: 15-2-2017

Thanks to all Experts, It means we can take service tax credit on Legal Requirement basis.

8 Dated: 15-2-2017
By:- Ganeshan Kalyani

Yes, if the rain water harvesting is essential for a factory to get license under factories act. Like for eg without pollution control equipment in a factory, factory license cannot be obtained . Thus Cenvat Credit on pollution control equipment is eligible.


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