5% of value payable as Cenvat Credit Not taken

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..... 5% of value payable as Cenvat Credit Not taken
Query (Issue) Started By: - ANAND SHEMBEKAR Dated:- 14-3-2011 Last Reply Date:- 15-3-2011 Service Tax
Got 4 Replies
Service Tax
Dear Sirs , w.e.f. 01/04/2011, the definition of exempted services includes services provided by taking abatement. In following two situations wheather 5% of Value is required to paid ? 01. ABC Constructions a .....

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..... sole proprietor providing Commercial or Industrial Construction services to XYZ Ltd. ABC takes abatement of 67% of value of bill as per noti.No.1/2006 and satisfy all conditions mentioned there in. Can ABC is required to pay 5% of 67% abatement value, can ABC recover the same from XYZ Ltd. 02. XYZ Ltd , receives GTA services from various transporters and pay service tax after taking abatement of .....

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..... 75% as per noti.No.1/2006 , shall XYZ Ltd. has to pay 5% of 67 % abatement value ? All are requested to study my point and reply suitably ANAND SHEMBEKAR CELL NO 91-9421187122 Reply By Mangesh Lokre: The Reply: Dear Sir Rule 6 of CCR 2004 talks about the obligation of manufacturer/ service provider who is providing both dutiable and exempted service. Availment of Abatment doesnot means t .....

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..... hat you are providing the output service. In both the cases cited above, you have to pay the Service Tat @10.3% and need not to reverse 5% of the abatment value. The 5% reversal is requied in the case where the services having NIL Rate of Tax. Also please note that this 5% reversal is not the Duty so CENVAT is not admissible to the buyer. Reply By ANAND SHEMBEKAR: The Reply: Thank you very mu .....

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..... ch Sir , I like to talk with you on Phone for few minutes can you give me your number Thanks A M SHEMBEKAR Reply By ANAND SHEMBEKAR: The Reply: So , if service provider take abatement 67% , then he has to pay 5% of value of 67% ? Reply By Mangesh Lokre: The Reply: Dear Mr Anand If you are taking the abatment of 67%, then you have to pay the STax 10.3% on 33% If you are taking the abatme .....

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..... nt of 75%, then you have to pay the STax 10.3% on 25% 5% Reversal of CENVAT is in the case where you are service provide of the Dutiable and Exempted service and No Seperate account is maintained for this. Hope this is clear.
Discussion Forum - Knowledge Sharing .....

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