TMI BlogAmendment to Circular No. 96/7/2007-ST dated the 23rd August, 2007 - Clarification in respect of renting of immovable property service and works contract serviceX X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioners of Service Tax (All) Commissioners of Central Excise (All) Commissioners of Central Excise Customs (All) Sub: Amendment to Circular No. 96/7/2007-ST dated the 23rd August, 2007 - Clarification in respect of renting of immovable property service and works contract service - Regarding. In the Circular No.96/7/2007-ST dated the 23rd August, 2007 ,- (i) after Reference Code 086.05 / 23.08.07, the following Reference Code and corresponding issue and clarification shall be inserted, namely:- Reference Code Issue Clarification (1) (2) (3) 096.01 / 04.01.08 Commercial or industrial construction service [section 65(105)(zzq)] or works ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the gross amount charged for the works contract less value of the transfer of property in goods involved in the execution of the works contract which is leviable to VAT / sales tax [Rule 2A of the Service Tax (Determination of Value) Rules, 2006]. Whether or not, excise duty paid on goods, subjected to levy of VAT / sales tax under works contract service, can be taken as credit under the CENVAT Credit Rules, 2004. Value for the purposes of levy of service tax under works contract service does not include the value pertaining to transfer of property in goods involved in the execution of a works contract leviable to VAT / sales tax. Works contract service provider is, therefore, not eligible to take credit of excise duty paid on such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing to payment received was discharged and the balance amount of service tax is required to be paid on or after 01.06.07 depending upon receipt of payment. Classification of a taxable service is determined based on the nature of service provided whereas liability to pay service tax is related to receipt of consideration. Vivisecting a single composite service and classifying the same under two different taxable services depending upon the time of receipt of the consideration is not legally sustainable. In view of the above, a service provider who paid service tax prior to 01.06.07 for the taxable service, namely, erection, commissioning or installation service, commercial or industrial construction service or construction of complex ser ..... X X X X Extracts X X X X X X X X Extracts X X X X
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