Credit of service tax on commission paid to foreign agent, Service Tax

[Atul Jain]

We have paid export commission to foreign agents. As per rules we have deposited Service Tax as liability in case of foreign payment regarding service tax is on the person getting services. Now we are have paid commission for the same for the month of March06. Till date we have not taken credit of the same. Now Cenvat Credit Rules of Excise has changed and wide Notification No 81 dated 13/7/06 they have specied that if any unit is exporting under Duty Draw Back, he can not take Cenvat Credit of input services. Can we take the credit of Commission paid to foreign agents now.

Posts / Replies

[Surender Gupta]

Generally, you can take the credit within one year from the date on which you are entitled to avail the credit. Therefore, you may take the credit by the end of March 2007. On the other side, if you taking Duty Drawback, you have to ascertain that no duty drawback is not for the service tax portion before availing cenvat credit. You can not take two benefits simultaneously. But, one benefit is always allowed.