Negative list of Input services- SEMINAR QUESTIONS & ANSWERS
Here are some of the questions raised in our Vizag seminar and their answers!
Q. Whether repairing of public roads done under contract awarded by local municipal administration attract service tax under ‘Maintenance or Management service” or it is exempted from payment of service tax under “commercial construction service” since road repair involves relaying of the road?
A. A clarification can be given on this issue, only after obtaining the practice being followed in other Commissionerates in such cases .
Q. Whether service tax paid on employee insurance policies by the manufacturer or service provider is eligible for taking Cenvat credit?
A. Service tax paid on Personal Accident policy, Mediclaim, and other insurance policies of employees is eligible for service tax credit. The only condition is that the company has to pay for the insurance policies and should cover only the employees. If insurance is for the whole family it is not available as credit.
As suggested by one of the participants of the seminar, the Government will consider preparing negative list of services, which are not available as credit.
Q. Are services received from abroad before 16/06/2005 liable for payment of service tax?.
A. Since the issue is before CESTAT (LB), no clarification can be issued in this matter. However, it is mostly likely that the issue may be decided partially in favour of the department by ruling that foreign services attract service tax from 16/06/2005.
Q. Whether service tax paid on “commercial construction service utilized for construction of Administrative block is available as credit?
A. Service tax paid on commercial construction of office building is available as credit as per the definition of “input service”.
Q. How the value of service is to be arrived in cases of contracts involving supply & apply of paints, since application of paint attract service tax?
A. It has to be arrived basing on the terms of the agreement. Value of the supply part can be arrived basing on the transaction value; it should not be difficult to arrive at the value of application part once value of supply part is known.
Q. Whether construction of complex service provided for the construction of residential quarters of defense establishment exempt from payment of service tax?
A. No such exemption is available.
Q. Whether service tax paid on services not listed in the Notification No. 41/07 dt. 6/10/2007 can be claimed as refund?
A. Service tax paid on services not listed in the Notification No. 41/07 is not available as refund.
Q. Whether Service tax paid on maintenance of employees' residential colony is
available as credit.
A. Service tax paid on the maintenance of factory is available. However, theservice tax paid on the maintenance of employees' colony or Guest House is not available as credit.
Q. Whether service tax paid to the caterer running the employee canteen is eligible for taking credit?
A. The answer is negative.
Q. Whether service tax paid on the transport service (Rent-a-cab service) for transport of employees is available as credit.
A. Yes, credit is available.
Q. Whether service tax is liable to be paid on container retention charges?
A. No answer can be given without examining the contract/agreement.
Q. Whether stevedoring service attract service tax under Cargo Handling Service or Port Service?
A. As the issue is before Tribunal, no comments can be given.