Cenvat credit

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

30 July 2012 I am working in a film production house. Yesterday i received an invoice of "A Suneel Studios" of RS 12 Lacs but when i verified the ST registration online i found the business registered in the name "Sunil Studio" and the PAN details are in the name of his owner and it is a sole proprietorship business. Please suggest me

1. if i make payment on wrong invoice which received ( A Suneel Studio), should i illegible to take input cenvat credit ?

2. is it necessary the name and a address shown in the online verification the same should appear in the invoice ?

RENGARAJ R.K

RENGARAJ R.K (Expert)
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31 July 2012 The cenvat is eligible based on the service tax charged and paid by the service provider. So, he is having a service tax registration number based on PAN. So, small correction in name of the firm does not matter for availing the cenvat benefit. However, please write to the party about the change in the name and ask him to issue service invoice with correct name in future.

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Querist : Anonymous

Querist : Anonymous (Querist)

03 August 2012 Thanks for replying, one more think is that is there any chances of avoiding of ST payment to govt or party collect ST from us and dont deposit the same to govt a/c ?

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Querist : Anonymous

Querist : Anonymous (Querist)

04 August 2012 Suppose if the owner having more than one business and ST registred for one and rasing invoice in the name of other business, in such situation can we take Cenvat credit ?

Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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19 July 2024 In the scenario where the owner has multiple businesses and is raising an invoice in the name of a business that is not registered for Service Tax (ST), you face a specific challenge regarding Cenvat credit eligibility. Here’s a detailed explanation:

1. **Cenvat Credit Eligibility Criteria:**
- To avail Cenvat credit on input services or goods, several conditions must be met, including that the goods or services must be received by the registered taxable person (recipient) and used in the course of providing taxable services or goods. The supplier must also be compliant with tax regulations.

2. **Invoice Requirements:**
- The invoice must correctly reflect the legal name, address, and GSTIN (Goods and Services Tax Identification Number) or ST registration number of the supplier. If the invoice is issued in the name of a business that is not registered for ST, it does not qualify as a valid document for availing Cenvat credit related to ST.

3. **Risk of Invalid Credits:**
- If you receive an invoice from a business that is not registered for ST, any ST charged on that invoice would not be eligible for Cenvat credit. Input tax credit can only be claimed on tax paid to a registered supplier who has validly charged and deposited the tax to the government.

4. **Verification and Due Diligence:**
- It’s crucial to verify the GSTIN or ST registration details of your suppliers before accepting invoices. This verification ensures that the supplier is legally registered and compliant with tax laws. In case of any discrepancy or doubt, you should clarify with the supplier and confirm their registration status.

5. **Legal and Compliance Implications:**
- Attempting to claim Cenvat credit based on invoices from businesses not registered for ST can lead to tax scrutiny and potential penalties if found non-compliant during audits or assessments. It’s important to adhere strictly to tax regulations and maintain proper documentation to support credit claims.

In conclusion, Cenvat credit can only be claimed on invoices that meet the specific requirements of tax registration and compliance. Invoices issued by businesses not registered for ST do not fulfill these criteria and therefore cannot be used to claim Cenvat credit related to ST. Always verify and validate invoices before accepting them to avoid risks associated with invalid credits.