Use service tax paid under reverse charge as tax credit

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Querist : Anonymous

Querist : Anonymous (Querist)

15 April 2014 Dear Sir,

Our company is liable to pay service tax under reverse charge mechanism on GTA. I want to know can a company use such service tax paid as tax credit with other tax credits like telephone expenses, internet expenses, courier expenses etc to deduct from the service tax which company liable to pay as service provider ?

Annu Agarwal

Annu Agarwal (Expert)
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15 April 2014 Yes,the credit of service tax paid under reverse charge on GTA can be used.

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Sandeep Mangal Agarwal

Sandeep Mangal Agarwal (Expert)
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15 April 2014 Agree with annu agarwal

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Querist : Anonymous

Querist : Anonymous (Querist)

16 April 2014 Can you give any section in this regards from cenvat credit rule or else ?

Annu Agarwal

Annu Agarwal (Expert)
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17 April 2014 As per 1st proviso to Rule 4(7) of Cenvat Credit Rules, 2004; the service recipient can avail cenvat credit of an input service, where service tax is paid by him on reverse charge, after making payment of value of input service to the service provider and after payment of service tax thereon. Thus, cenvat credit is not available unless payment of value of input service is made.

Querist : Anonymous

Querist : Anonymous (Querist)

18 April 2014 But there is no word "reverse charge" specified and no provisions mentioned as well. Can you provide link over here so i can get confirmed.