As per Rule 4 (7) of Cenvat Credit Rules, 2004, in case of associated enterprises, service tax is payable at the time of billing made (not at the time payment is received.
Accordingly, we paid Service Tax on billing to associated enterprises at the time of billing (not at the time of receipt of payment). However, due to certain reasons, this amount is not to be recovered from the party and eventually, this debtors is being written off in current financial year.
The query is whether the Service Tax paid at the time of billing can be taken back as credit against future service tax liability?
If Yes, pls support your justification with any provisions of law, if there is any.
02 January 2011
Service tax may get be refunded , but all will depent on the causes , why payment is not recived by the enterprises, and what legal action was taken in this regard.
CAclubindia
