Narayana (Consultant) (29 Points)
28 May 2012Dear friends,
A cliant is providing services to PSU and raising taxable invoice and accounting in their books. But the payment is released by PSU except Service Tax stating that on production of tax payment challan payment will be released. The Cliant has CENVAT credit and no need pay tax. Hence, cannot produce challan. Plz let me know whether is there any such clause for release of payment by PSUs and any other remedy for the above.
Manoj BG
(Tax Professional and in Service)
(1795 Points)
Replied 28 May 2012
HI,
There is no provision in service tax rule or finance act 1994 reagarding payment of service tax by customer to vendor only on production of proof of service tax payment. However, orgonisation can put such a conditions for their internal workings for in their commercial dealings. Even if u r not liable to pay service tax as u have sufficient cenvat credit available, u can communicate the same with that PSU under the proper authority of your orgonisation.
As far as law is concerned, no such condition exists in service tax rules/ finance act 1994.
Regards,
Manoj BG.
Manoj BG
(Tax Professional and in Service)
(1795 Points)
Replied 28 May 2012
HI,
There is no provision in service tax rule or finance act 1994 reagarding payment of service tax by customer to vendor only on production of proof of service tax payment. However, orgonisation can put such a conditions for their internal workings for in their commercial dealings. Even if u r not liable to pay service tax as u have sufficient cenvat credit available, u can communicate the same with that PSU under the proper authority of your orgonisation.
As far as law is concerned, no such condition exists in service tax rules/ finance act 1994.
Regards,
Manoj BG.
Prateek Agarwal
(Sr. Executive - Finance & Accounts)
(1732 Points)
Replied 28 May 2012
Yes..you should communicate the same to the PSU that you have sufficient CENVAT credit. On this ground, they have to release the payment inclusive of service tax.
Regards
Prateek
omalur v srinivasan
(Commercial Head)
(24 Points)
Replied 16 June 2012
You can submit the half yearly return of service for having appropriated service tax payments from Cenvat credit which would be a sufficient prrof for having made the payment to the service tax authorities. I presume the PSU is insisting for challan as they would be eligible to avail credit of this service tax payment.
Ashish Gupta
(Proprietor)
(245 Points)
Replied 17 June 2012
Agreed with Mr. Srinivasan. You can also produce a certificate to your client regarding payment of your service tax through CENVAT.
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