14 April 2013
As per Rule 3(1) of CCR, only output service provider or manufacturer is allowed to take ccr and can be used for payment of out liability, also same as per 2(l)of CCR rules i.e, Input Service. Hence ccr will be allowed to only those SR(service recepient), who themselves are service provider, not to a retailer because for them the service is not be Input Service in terms of 2(l).
CCR will be allowed of total tax paid by SP(service provider) and SR(service receipient) as ultimately paid from the pocket of SR, but that CCR cannot be used to pay off the reverse charge liability by SR as that is input service, though can be used on other output liability on output service.
Explained by.. Newly inserted: Explanation to Rule 3(4) of CCR provides that “CENVAT Credit cannot be used for payment of service tax in respect of services where the person liable to pay tax is the service recipient.” Therefore, SR has no option but to make payment of ST and claim the same as CCr thereafter.
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