23 January 2015
we received consultancy service from an engineer in june2014. he issued invoice of Rs.112360 including service tax on dated 01.07.2014. we made entry of this transaction on 15.11.2014 with availing service tax input of rs 12360. & payment of this transaction made on 17.11.2014 with service tax. what we should required to reverse such credit? if we reversed this credit when we take recredit? what we are eligible to take recredit? plese reply.
23 January 2015
As per Rule 4(7) of CENVAT Credit Rules, 2004, if service provider avail CENVAT credit of input services and not made the payment of such input service within three months then the service provider shall reverse the availed CENVAT Credit.
In the given situation CENVAT credit should be reverse by passing a Journal Entry in CENVAT credit register or can be reverse by paying in cash. And the CENVAT credit on the same can be avail on or after the date of payment.
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