Input credit of service tax

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

09 March 2016 How to claim credit for the service tax paid on services taken from banks, since we don't receive invoices and neither it mentions service tax separately in statements.????

Does it make a difference in cenvat claim if services has been accounted in a different branch whereas invoices shows name of a different unit???

Please provide links for the law as well.

Thanks in advance....

Nilesh

Nilesh (Expert)
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10 March 2016 Dear

You can take credit based on bank statement subject to fact that it should mention service tax Separately, also service tax regn number require.

2nd para is not clear

Querist : Anonymous

Querist : Anonymous (Querist)

21 March 2016 I mean suppose the services are received for "XYZ" branch and also accounted there but the invoices received against the services mention "ABC" branch...

Can cenvat still be claimed or we need to get the revised invoice?????

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Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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01 August 2024 ### Claiming Cenvat Credit for Service Tax Paid on Banking Services

When dealing with service tax on banking services where invoices are not explicitly received, and service tax is not separately mentioned, the process of claiming Cenvat credit can be tricky. Here’s a step-by-step guide:

#### **1. Understanding the Issue:**
- **Service Tax on Banking Services:** Banking services are taxable under service tax and should ideally have a tax invoice showing the service tax charged.
- **Lack of Separate Invoices:** Often, banks provide consolidated statements that do not separately show the service tax component.

#### **2. Claiming Cenvat Credit Without Separate Invoices:**

**a. **Statement-Based Credit:**
- **Regulation:** According to Cenvat Credit Rules, 2004, service tax credit can be claimed based on a service tax invoice, bill, or challan. If these are not available, the credit may be claimed based on the bank statement and other supporting documents.
- **Documentation:** Collect and retain bank statements or payment receipts showing the charges. Ensure that these documents can be correlated with the services received.

**b. **Revised Invoices or Certificates:**
- **Request Revised Invoices:** It is advisable to request the bank to provide revised invoices or certificates indicating the service tax amount. This can help in aligning with Cenvat Credit Rules and ensuring that the claim is properly supported.
- **Tax Paid Certificate:** If revised invoices are not feasible, ask the bank for a certificate stating the service tax paid. This certificate should detail the services provided and the corresponding tax.

#### **3. Dealing with Different Branches:**

**a. **Claiming Credit When Services are Accounted in a Different Branch:**
- **Centralized Credit:** The Cenvat Credit Rules do allow for centralized credit claims as long as the credit is linked to the services used for business purposes.
- **Documentation:** Maintain detailed records of how the services are used across branches. Ensure that the inter-branch services are properly accounted for in your records.

**b. **Invoices Showing Different Branches:**
- **No Impact on Credit Claim:** If the invoice shows a different branch but the service was utilized by the branch that accounted for it, you can still claim the Cenvat credit. However, the documentation must be clear and should demonstrate that the services were used for business purposes.

#### **4. Legal References and Links:**

**a. **Cenvat Credit Rules, 2004:**
- **[Cenvat Credit Rules, 2004 (Government of India)](https://cbec-gst.gov.in/legislation.html)**
- **Rule 9:** Addresses the documentation required for claiming credit, including the necessity of an invoice, bill, or challan.

**b. **Service Tax Rules, 1994:**
- **[Service Tax Rules, 1994 (Government of India)](https://cbec-gst.gov.in/legislation.html)**

**c. **Relevant Circulars:**
- **CBEC Circulars** on Cenvat Credit may provide additional guidance. Check for updates on the CBEC website or through professional advisories.

#### **5. Practical Tips:**
- **Maintain Proper Documentation:** Always keep records of payments, statements, and any correspondence with the bank.
- **Consult a Professional:** For specific scenarios and interpretations, it is advisable to consult a tax professional or legal advisor who can provide tailored advice based on your situation.

By following these steps, you can better navigate the process of claiming Cenvat credit for service tax paid on banking services, even in cases where the invoices do not explicitly mention service tax.