Budget 2011 – Service Tax – Amendments to Works Contract (Composition Scheme for Payment of Service Tax) Rules, 2007

10.1 A new sub-rule (2A) is being added in rule 3 in the Works Contract (Composition Scheme for Payment of Service Tax) Rules, 2007 vide Notification 1/2011-ST so as to restrict the Cenvat credit to 40% of the tax paid on services relating to erection, commissioning & installation; commercial or industrial construction and construction of residential complex, in case tax has been paid on full value of the service after availing Cenvat credit on inputs i.e. without availing exemption notification 1/2006-ST dated 01.03.2006. This has been done to ensure that the credit on inputs is not availed of indirectly while availing of the composition scheme.

Related posts:

1. Announcement of Rules amending Works Contract (Composition Scheme for Payment of Service Tax) Rules, 2007
2. Budget 2011 – Service Tax – Amendments to Service Tax (Determination of Value) Rules, 2006
3. No direct decision in favour of Revenue for levy of service tax on the service component of a works contract prior to 1-6-2007
4. Budget 2011 – Service Tax – Amendments to Taxation of Services (Provided from Outside India and Received in India) Rules, 2006
5. Budget 2011 – Service Tax – Amendments to Export of Services Rules, 2005