TMI BlogCenvat credit for Service Tax on RoyaltyX X X X Extracts X X X X X X X X Extracts X X X X ..... Respeted Sir/s, In our case, we have to pay Royalty on Sale to In Korea and commission on Guarantee . This is our liability to deposit the Service Tax on the Remitted amount. 1. Is service tax applicable on Commission on Guarantee. 2. Can we adjust the Liability from our Cenvat credits. 3. If we have to deposit the Sevice Tax then can we take the Cenvat Credit of the Service Tax deposi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted. Please clarify. Best Regards. Pradeep Kaushik - Reply By Pradeep Khatri - The Reply = Yes, you are liable to pay the service tax on Commissioner on Gurantee under BAS. No, you can't adjust the liability from your CENVAT credit Account. Under Section 66A , you need to pay it in cash. Yes, you can avail the CENVAT credit against such payment of Service Tax - Reply By Raman ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ujam Varadarajan - The Reply = 1.You are liable to service tax on Commission on Guarantee under reverse charge basis under Section 66A . Category of service would depend on the nature of service rendered viz. whether it is commission on corporate guarantee or royalty on sale. 2. Payment of service tax to be made under reverse charge cannot be adjusted against cenvat credit and is to be pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id by cash. 3. Service tax paid under reverse charge is eligible for Cenvat Credit, subject to restrictions provided under Cenvat Credit Rule, 2004. - Reply By vijay kumar - The Reply = 1. Not every expenditure incurred in foreign currency nor amount paid to a person/firm abroad is liable to service tax under Section 66A . There has to be a service which is taxable and the foreign firm sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ould not have a permanent establishment in India. In your case, please elaborate what is the nature of the activity pertaining to "Commission on guarantee" and whether any service is involved. If so, the taxability thereof can be examined. 2. Service tax in terms of Section 66A has to be paid in cash and cenvat credit cannot be used because such amount is not paid in the capacity of a service ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provider but as a service receiver under the legal fiction created by the statute. 3. If tax is payable under Section 66A , you can take credit of the same provided it is an input service for you in terms of Rule 2(l) of the CCR, 2004 . In this regard, pl refer to CBEC Circular F.No.BI/4/2006-TRU dated 19th April, 2006 and Board's Letter F.No. 354/148/2009-TRU Dated 16-7-2009. - Reply B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y anupam singh - The Reply = 1) Yes, you are liable to pay the service tax. 2) No, you can not adjust the liability from your CENVAT credit Account. Under Section 66A, you will have to pay it in cash only. 3) Yes, you can avail the CENVAT credit against such payment of Service Tax. - Reply By RAM NAUDIYAL - The Reply = Dear Experts, We have paid service tax on royalty from our cenvat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... credit due non clearty now service tax department raise a demand for payment of service tax alongwith interest from 2007. My question is i have paid service tax through cenvat credit now i am ready to pay in cash. So why i do pay interest. Can you suggest me any legal advice in this regards. thanks - Reply By RAM NAUDIYAL - The Reply = SUPPOSE I HAVE PAID SERVICE TAX ON ROYALTY THROUGH CENVAT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CREDIT THEN WHAT ARE THE CONSEQUENCES IN THIS REGARD. WILL WE HAVE TO PAY INTEREST. - Reply By vijay kumar - The Reply = Dear Sir, as per the Department, what is paid by you through debit in cenvat credit account is not tax. Hence they have issued the notice demanding the tax in cash and consequently the interest thereon. From the facts, it appears that the action of the Department is legal and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proper. If you pay the tax with interest in cash, you may take back the amount debited earlier in your account, preferably after intimating the Department. If the tax paid in cash is an input service for you in terms of Rule 2(l) of CCR, 2004 you can take credit of such amount also and utilize it for payment of service tax on other services, if any, rendered as a service provider. - Reply By ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... JAMES PG - The Reply = Cenvat credit can be utilised only for payment of Duty on finished goods or payment of Service Tax for output service. Definition of output service does not include reverse charge payments and hence Cenvat credit cannot be utilised for such reverse charge payment - Cenvat credit for Service Tax on Royalty - Query Started By: - Pradeep Kaushik Dated:- 6-1-2012 Central Exci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se - Got 8 Replies - Central Excise - Discussion Forum - Knowledge Sharing, reply post by an expert, personal opinion Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
