Provisions of rule 2(A) of the services tax

S.V. Jiwani vs. commissioner of central Excise & S.T. [2014] 35 S.T.R. 351 (Tri. – Ahmd.)

Provisions of rule 2(A) of the services tax (determination of value ) rules, 2006 applicable only when value cannot be determined u/s.67(1)(2)(3) of the finance act and rule 3(1) of the works contract (composition scheme for payment of services tax ) rules, 2007 is optional.

Facts:

Appellant were awarded a contract for setting up plant and services tax was discharged on the entire value of the contract under works contract services and CENVET credit was availed on inputs and input services there. Department contended that under works contact services there is no option to pay tax at the full rate and thus the availment and utilization of CENVAT credit was incorrect.

 

Held:

The expression “subject to the provisions of section 67” under Rule 2A of the valuation rules means that if. Value of services involved in execution of works contract services cannot be determined u/s.67 then only rule 2a would apply. Rule 3(1) of the composition rules is merely an option provided to discharge the services tax liability and hence CENVET credit on inputs and inputs services is available since tax has been discharged @ full rate on the entire value of the contract u/s. 67 being a statutory provision of the act