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Time limt for Cenvat credit under RCM, Service Tax

Issue Id: - 114618
Dated: 12-2-2019
By:- Prudhvi Jakkula
Time limt for Cenvat credit under RCM

  • Contents

Dear experts,

Please solve my query.

Is it possible to claim credit of tax paid under RCM on input services received after one year of invoice date but immediately in the subsequent return after payment?

Please solve my query

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Posts / Replies

Showing Replies 1 to 15 of 22 Records

1 Dated: 12-2-2019

Answer is NO. Section 18(2) and Section 16(4) of CGST Act, 2017 do not allow more than one year period from the date of invoice.No rule helps in this context.

2 Dated: 12-2-2019

It is further opined that Section 16 of the CGST Act does not differentiate between credit of tax charged by the supplier or credit of tax paid under RCM by the recipient. Only difference is that the recipient will avail credit after making payment of tax in cash to Govt.

3 Dated: 13-2-2019
By:- Prudhvi Jakkula

Sir Thanks for your query

Is the same rule applicable under service tax also??

4 Dated: 13-2-2019

During pre-GST era, there was restriction of six months for availing cenvat credit and this restriction was extended to one year vide Notification No.06/15-CE(NT) dated 1.3.15.

5 Dated: 13-2-2019
By:- Prudhvi Jakkula

Yes sir, But my doubt is whether that one year limit is applicable for RCM also??

6 Dated: 13-2-2019

Yes. One year sword was applicable for RCM also during pre-GST era for Service Tax Credit under RCM.

7 Dated: 13-2-2019

Dear Sh. Prudhvi Jakkula Ji,

Pl. peruse Section 68(2) of the Finance Act, 1994

SECTION [68. Payment of service tax. - (1) Every person providing taxable service to any person shall pay service tax at the rate specified in section 66 in such manner and within such period as may be prescribed.

(2) Notwithstanding anything contained in sub-section (1), in respect of [such taxable services as may be notified] by the Central Government in the Official Gazette, the service tax thereon shall be paid by such person and in such manner as may be prescribed at the rate specified in section 66 and all the provisions of this Chapter shall apply to such person as if he is the person liable for paying the service tax in relation to such service :]

In view of Section 68(2), it can be inferred that Service Recipient is deemed Service Provider and , therefore, Rule 4(7) of the Cenvat Credit Rules, 2004 imposing restriction of one year for availment of input service credit is also applicable for a person taking credit under RCM.

8 Dated: 13-2-2019
By:- Prudhvi Jakkula

Thank your very much sir.yes

9 Dated: 13-2-2019

One year restriction is also applicable to RCM.

10 Dated: 14-2-2019
By:- rajkumar shukla

Issue is not clear,after one year of invoice raised by GTA? Or after payment by cash in challan?

11 Dated: 14-2-2019
By:- Prudhvi Jakkula

One year after self invoice raised by service recipient but not from Payment challan

12 Dated: 14-2-2019
By:- rajkumar shukla

since third proviso to rule 4(1) of cenvat credit rules talks abt after one year of the date of issue of any documents specified in sub rule (1) of rule 9 and rule 9 specifies challan evidencing payment of service tax as document for taking credit in case of service recipients, I am of the view that it is one year from payment challan and not the date of invoice that would be starting time the for taking credit.

13 Dated: 14-2-2019

Dear Querist,

The following case law proves that under RCM Service Recipient is deemed service provider and the date of issuance of self invoice is to be considered.

2008 (11) S.T.R. 243 (Tri. - Del.) =  2008 (3) TMI 177 - CESTAT NEW DELHI PRAKASH INDUSTRIES LTD. Versus COMMISSIONER OF C. EX., RAIPUR

14 Dated: 14-2-2019

Point of taxation is also relevant.

RULE [7. Determination of point of taxation in case of specified services or persons.- Notwithstanding anything [contained in rules 3, 4, or 8], the point of taxation in respect of the persons required to pay tax as recipients of service under the rules made in this regard in respect of services notified under sub-section (2) of section 68 of the Act, shall be the date on which payment is made :

[Provided that, where the payment is not made within a period of three months of the date of invoice, the point of taxation shall be determined the date immediately following the said period of three months

15 Dated: 15-2-2019
By:- rajkumar shukla

In my view point of taxation is relevant only for payment of tax and not when credit should be taken.

The judgement quoted by Sri Kasturi sethi ji i refers to self invoice raised as a document for availing credit as payment was made through cenvat credit which is normally not allowed by the department.If the payment has been made in cash through challan , challan would be the document for taking credit. This judgement nowhere says that challan is not a document for availing credit as it was not an issue before it. so if challan is a document for taking credit, time limit should be reckoned from this date.

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