Cenvat credit on service tax paid under rcm after 01.10.2014

This query is : Resolved

Saroj Rout (Querist)
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09 October 2014 We have a bill from a foreign party dated 17.02.2014.Said bill is pending for payment.

my query is:-

1.If we are releasing the payment now. then what will be the impact on service tax liability under Reverse charge Mechanism.

2.Can the service recipient avail service tax credit on the basis of the challan.

Regards.
Saroj Rout

Annu Agarwal

Annu Agarwal (Expert)
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09 October 2014 1.Your is a case of import of service.As per serial no.10 of notification no.30/2012,100% service tax shall be paid by you.
Now as per Point of Taxation Rules,2011
recently added rule 10,in case of reverse charge where the payment is not made within 6 months from date of invoice ,the point of taxation shall be date of invoice.
In your case date of invoice is 17.02.2014 and date of payment is 09.10.2014 which is beyond 6 months .So POT shall be date of invoice i.e. 17.02.2014 and due date to deposit service tax is 06.03.2014.
So you have to pay service tax with interest and penalty now.

2.After paying the service tax ,you can avail the as per Rule 4(7) of Cenvat Credit Rules.

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Saroj Rout

Saroj Rout (Querist)
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09 October 2014 One thing:-

If I am paying service tax today
My Challan date-09.10.2014
Party Inv Date- 17.02.2014

Wheather cenvat credit will be affected by the recent change in cenvat credit rule 2004 vide Notification no 21/2014 NT which is saying cenvat credit on input/input services will lapse if it is not taken within 6 months from the date of invoice or any specific document.

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Annu Agarwal

Annu Agarwal (Expert)
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09 October 2014 As per my view the amendment is applicable for invoices issued after 01.09.2014.
No change in cenvat credit availament for prior invoices.