S.Tax Input Credit under reverse charges Machenism, Service Tax

[RAM NAUDIYAL]

Dear Experts,

We are in Taxable Terrotory and  receiving services from non taxable territory like J&K and liable to pay service tax under reverse charge machenism. Can we take input credit after payment of service tax.

Thanks

Posts / Replies

[Seetharaman K C]

The First proviso to Rule 4 (7) of the Cenvat Credit Rule, 2004 clearly specifies that in case of any service tax paid on the reverse charge mechanism CENVAT credit shall be allowed only after the payment is made. As the service receiver has to make the payment the CENVAT credit can be taken on the basis of the challan making such payment