Cenvat credit is authorized on works contract service, construction service, consultancy and fire protection service used for the construction of real estate: CESTAT

Crédit Cenvat - Works Contracts Service - Construction Service - Advice - Fire Protection Service - Construction - Real Estate - CESTAT - taxscan

The Customs, Excise and Services Tax Appeal Tribunal (CESTAT) in Hyderabad has ruled that Cenvat credit is permitted on contracted works services, construction services, consultancy services and construction services. fire protection used for the construction of real estate.

The appellant, M/s. VITP Private Limited is engaged in the development of IT parks and other industrial and commercial premises which are then leased to a wide range of industries. During the valuation process, the valuation agent denied Cenvat Credit on entry services used for the construction of the building and used to promote their premises for better rental opportunities.

Counsel for the Appellant, relying on the Tribunal’s decision in Regency Park Property Management Services Pvt. ltd. vs. CST argued that the Cenvat credit was properly used on input services such as works contract service, construction service, consultancy and fire protection service used in the construction of real estate in accordance to Rule 2(l) of the Cenvat Credit Rules, 2004.

The Coram of Mr. PK Choudhary, Member (Judicial) and Mr. PV Subba Rao, Member (Technical) relying on the judgment of the Supreme Court ruled that “we are inclined to allow the Cenvat credit for input services used by the appellant in the construction of real estate which was then leased to various customers”. The Tribunal, with respect to the eligibility of the Cenvat credit on event management services, concluded that “we note that Rule 2(l) of the Cenvat Credit Rules, 2004 does not exclude such service from eligibility for the use of Cenvat Credit, as such expenditure was incurred in the course of carrying on business and therefore are business promotion expenses and the same is eligible as a Cenvat credit in our opinion.”.

MS Tirumalai and MA Rangadham appeared on behalf of the appellant and the respondent respectively.

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Ms. VITP Private Limited v Central Tax Commissioner

Counsel for the Appellant: Shri S. Tirumalai

Counsel for the Respondent: Shri A. Rangadham, Shri C. Mallikarjun Reddy

CITATION: 2022 TAXSCAN (CESTAT) 402

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