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May 2011

Erection, Commissioning & Construction Works Contract — CENVAT credit restricted to 40% when tax paid on the full value — Notification No. 01/2011, dated 1-3-2011.

By Tarun Ghia, Brijesh Cholera, Pratik Mehta, Hardik Shah Chartered Accountants
Reading Time 1 mins
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By this Notification Works Contract (Composition Scheme for payment of Service Tax Rules, 2007) have been amended to provide that the CENVAT credit on taxable services of erection, commissioning and installation, commercial or industrial construction and construction of commercial complex shall be available only to the extent of 40% of the service tax paid when such tax has been paid on full value of the service after availing CENVAT credit on inputs.

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