Time limit for availing cenvat credit of service tax.

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Querist : Anonymous

Querist : Anonymous (Querist)

29 May 2014 what is time limit for availing of cenvat credit of service tax and under which section.please reply this question .thanks in advance

Manish Sharma

Manish Sharma (Expert)
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30 May 2014 Hi,

In terms of Rule 4(7) of the CENVAT Credit Rules, 2004, the CENVAT credit in respect of Input Service shall be allowed, on and after the day on which the invoice, bill or challan referred to in Rule 9 is received.

In case of reverse charge, CENVAT credit shall be allowed only after the payment is made of the value of input services.

Provided further, in case payment of value of input service is not made within three months of the date of invoice, service provider would be require to pay an amount equivalent to CENVAT credit availed and in case payment is made thereafter the output service provider shall be entitle to avail credit.

Thus in a nut shell, there is no time limit fixed for claiming CENVAT credit of Input Service once the invoice is received and payment is made within three months from date of invoice.

However, to be on the safer side, it would be advisable to take the Credit within reasonable time frame so as to avoid unwarranted litigation.