Treatment of input service tax paid pre-registration period
This query is : Resolved
10 March 2010
Dear all,
We are a Pvt ltd company. We have just been into domestic market. Accordingly, we are in the process of service tax registration.
We have done the online registration on ACES.GOV.IN & submitted the required declaration to the service tax division office. Now they are supposed to generate our ser tax code / certificate online in next few days, which we can view while logging in to the site.
My question is what will be the position of service tax paid in input service during this meantime (before having the ST-2)???
Its urgent.
Please reply
We are a Pvt ltd company. We have just been into domestic market. Accordingly, we are in the process of service tax registration.
We have done the online registration on ACES.GOV.IN & submitted the required declaration to the service tax division office. Now they are supposed to generate our ser tax code / certificate online in next few days, which we can view while logging in to the site.
My question is what will be the position of service tax paid in input service during this meantime (before having the ST-2)???
Its urgent.
Please reply
10 March 2010
The entitlement to Cenvat Credit and Registration are two different issue.
Though the department may object, there is no infirmity in taking credit of tax paid on input services, even prior to obtaining registration.
Though the department may object, there is no infirmity in taking credit of tax paid on input services, even prior to obtaining registration.
10 March 2010
Dear Shyam, could you please provide me any circular or notification on above matter. Regards Pragnesh
10 March 2010
Dear Pragnesh,
There is no circular/notification on the subject. In my view, there is no need of it.
As per the CCR, the only requirement is that the service should be an input service and should have been used for providing output service. No where it is mentioned that the assessee should have been registered prior to receipt of the service.
The liability to tax and cenvat entitlement are co-existent. The output service provider is liable to pay tax for period prior to taking registration. The same ratio should apply to Cenvat Credit as well.
There is no circular/notification on the subject. In my view, there is no need of it.
As per the CCR, the only requirement is that the service should be an input service and should have been used for providing output service. No where it is mentioned that the assessee should have been registered prior to receipt of the service.
The liability to tax and cenvat entitlement are co-existent. The output service provider is liable to pay tax for period prior to taking registration. The same ratio should apply to Cenvat Credit as well.
10 March 2010
Dear Shyam Actually my query is I have registration with ST, also i have cenvat balance. but in future i am going for registration of additional categories which i suppose to take for future liability. In such case shall i adjust my cenvat credit against my liability. Regards
Pragnesh
Pragnesh
10 March 2010
There is no need to maintain separate cenvat balance for differeent category of services. Cenvat is a common pool.
If otherwise eligible, Cenvat can be carried forward and adjusted against future liability.
However, since there accumulated un adjusted balance, please see whether Rule 6 is attracted. The said rule is attracted, when input services are used for both taxable as well as non taxable services.
Ofcourse, it is difficult to opine in the absence of full facts.
If otherwise eligible, Cenvat can be carried forward and adjusted against future liability.
However, since there accumulated un adjusted balance, please see whether Rule 6 is attracted. The said rule is attracted, when input services are used for both taxable as well as non taxable services.
Ofcourse, it is difficult to opine in the absence of full facts.
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