Service Tax credit reversal on unadjusted advance

This query is : Resolved

Sanjive Kumar Singh (Querist)
Follow

15 April 2011 Cenvat Credit has bee disallowed on certain input services. We have taken credit for sevice tax on advance paid against certain input services prior to amendment. The period of rendering service will be after the effective date of amendment.

Can any one guide whether we need to reverse the credit taken on such advance payment which is unutilised in the books.

Thanks,
Sanjive Kumar Singh.

Kumar Babu.G

Kumar Babu.G (Expert)
Follow

15 April 2011 At the time of rendering service,as per law we should be eligible to take cenvat credit of service tax paid on those services.Since date of rendering is after the effective date of amendment,you have to reverse the cenvat credit availed on advance paid for those services.