Cenvat credit on import service

This query is : Resolved

G.R.Anantha Subramaniam (Querist)
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03 January 2015 Hi

We have made the commission payment to our HQ in US and relevant Service Tax has been paid @12.36%. This pertains to previous year which we paid service tax during this year only alongwith the interest.

Now, will we be allowed to take CENVAT Credit on the same during our Q3 liability?

Mohit Singla

Mohit Singla (Expert)
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03 January 2015 yes you can take the cenvat credit of the service tax paid under reverse charge any time subject to payment of the same. but it can't be used for the payment of service tax in reverse charge. Service tax under reverse charge can only be paid in cash.

G.R.Anantha Subramaniam

G.R.Anantha Subramaniam (Querist)
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03 January 2015 So you mean to say we can take this credit on the other service tax payments. As such, there is no other RCM applicability cases.

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Mohit Singla

Mohit Singla (Expert)
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03 January 2015 Yes you can utilize this credit for the payment of service tax on output services.

Rupesh Jain

Rupesh Jain (Expert)
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03 January 2015 if you are pay the reverse charge then no credit will be allowed.

Mohit Singla

Mohit Singla (Expert)
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05 January 2015 Rupesh its no where mentioned in the finance act 1994 that we can not take the cenvat credit of service tax paid under reverse charge. The only condition is that first it must be paid in cash after that assess will be eligible for the cenvat Rule 3 of CCR 2004.
Secondly in case of services on which Abatement is given, cenvat credit not allowed. but their is no abatement on import of services.
Hence credit will be allowed