Input service credit - Reg., Service Tax

[vinay wakde]

We are receiving monetary consideration for following activities and we are paying service Tax under reverse charge method.

(1)Penalty imposed on supplier for late supply of material.

(2)Amount recovered from the contractor for delay or non completion of work beyond an agreed date.

(3)Amount recovered by the employer from employee for failure to comply with contracted conditions i.e. recovery of notice pay.

(4) Penalty and Fines collected by the company for maintenance of building & structures. 

Kindly let us know whether we shall claim CENVAT on above Input services received by us after making e-payment under reverse charge method.

Regards,

VINAY

Posts / Replies

[Madhukar N Hiregange]

Why you have to pay ST on reverse charge for penalty as that is not a consideration is not understood.

Compensation may however be liable. Under reverse charge only if liable.