CENVAT credit, Service Tax

[VAMSI KRISHNA]

Sir,

As per explanation to Rule 3(4) of CENVAT credit rules 2004... (as inserted by the 28/2012-Central Excise (N.T), Dated 20/06/2012) CENVAT credit cannot be used for payment of service tax in respect of services where the person liable to pay tax is the service recipient.

So on the basis of above amendment dated 20-06-2012.. it shows that service receiver should discharge his liability in cash only.

As per first proviso to 4(7) of CENVAT credit rules 2004 (Reproduced below),

Provided that in respect of input service where whole or part of the service tax is liable to be paid by the recipient of service, credit of service tax payable by the service recipient shall be allowed after such service tax is paid......

it seems CENVAT credit is eligible input only when we are paid to GOVT..

My service tax liability for the month of JAN as follows

Service tax Collected (liable under 68(1))	15000
Service tax payable under 68(2)	5000
CENVAT credit (other than 5000 above)	8000

The due date for payment of service tax liability of JAN is on or before 6 th of FEB....

as per provisions of Service tax my service tax payment as below

Collected	15000
CENVAT	8000
Paid in cash	7000
68(2) liability	5000
Total payment in cash	12000

As per first proviso to 4(7) of CENVAT credit rules 2004 whatever the amount paid under 68(2) is eligible for CENVAT credit only after payment to govt......

my doubt is whether this 5000 is eligible credit in the month of jan . because of this 68(2) liability is paid on 4 th of feb.... so as per the above proviso it is eligible credit for the month of jan..???????????

Thanks in advance

Posts / Replies

[Himansu Sha]

No. it will be eligible in the month of Feb. as per Rule 4(7) sicince the amount is paid in Feb. Basides the said provision you will need a document to take the credit.In Jan. you will not have any document to take the credit. After you generate the challan bsing upon that you will take the credit.

If you pay in the month of Jan. itself, the credit will be eligible in Jan.

[Himansu Sha]

Also this credit is subject to the provision of Rule 2(l) of CCR 2004

[KASTURI SETHI]

No assessee wants to pay Govt. dues before last date but at the same time they want benefits in advance. How is it possible ? You can not enjoy benefits of both worlds. To cap it all, I fully support the views of Sh.Himansu Share, an expert.

[MARIAPPAN GOVINDARAJAN]

I endorse the views of Shri Himanshu

[Himansu Sha]

Thank you sir

[VAMSI KRISHNA]

Respected Experts,

Thanks for your reply....