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Service tax cenvat credit

Vasu S (Officer Commercial) (75 Points)

28 November 2011

I am worked in manufacturing unit.

Service provider bill raised in our name. payment not done.

we can avail service tax cenvat credit before payment. ?

Please clarify.

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CA Gunjan H Shah (CA) (230 Points)
Replied 28 November 2011

Notification No. 13/2011-C.E. (N.T.), dated 31-3-2011 amends Cenvat Credit Rules 2004.

The said notification amends rule 4 (7). Accordingly

The CENVAT credit in respect of input service shall be allowed, on or after the day on which the invoice, bill or, as the case may be, challan referred to in rule 9 is received :

For Revercse Charge :Provided that in case of an input service where the service tax is paid on reverse charge by the recipient of the service, the CENVAT credit in respect of such input service shall be allowed on or after the day on which payment is made of the value of input service and the service tax paid or payable as indicated in invoice, bill or, as the case may be, challan referred to in rule 9 :

Credit to be reversed if payment not made within 3 days: Provided further that in case the payment of the value of input service and the service tax paid or payable as indicated in the invoice, bill or, as the case may be, challan referred to in rule 9, is not made within three months of the date of the invoice, bill or, as the case may be, challan, the manufacturer or the service provider who has taken credit on such input service, shall pay an amount equal to the CENVAT credit availed on such input service and in case the said payment is made, the manufacturer or output service provider, as the case may be, shall be entitled to take the credit of the amount equivalent to the CENVAT credit paid earlier subject to the other provisions of these rules :

Credit to be reversed if payment received back : Provided also that if any payment or part thereof, made towards an input service is refunded or a credit note is received by the manufacturer or the service provider who has taken credit on such input service, he shall pay an amount equal to the CENVAT credit availed in respect of the amount so refunded or credited :

I hope this helps you.

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Ghanshyam Kumar Maurya (tax practitioner) (190 Points)
Replied 28 November 2011

you can avail the benefit of cenvat credit only when once a bill raised.but if u don't payment of such bill within 90 days then if service provider deposits such amount of tax then the liability of tax at yours hand.

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amol (account) (27 Points)
Replied 24 December 2011

Is it any exemption in service tax rate for airways industries?

CA Prabhat Gupta (Manager (Indirect Taxes)) (821 Points)
Replied 24 December 2011

Mr. Amol,

Please give some details of type of Service provided by you. "airways industries" as used by you is a very vague term and may include a lot of things.

Abhijit Sawarkar (Chartered Accountant) (56 Points)
Replied 10 September 2012

Dear Sir,

We are provider of crane services in India. We are paying services tax under “Supply of Tangible good” category. One of our input service provider (Pvt. Ltd. Co)is providing us service of “Machining” wherein he reshape some of our parts of cranes as per company requirement (All raw material is provided by us). Input service provider has gross turnover of 45 Lacs but does not registered under service tax & therefore he is not charging any service tax amount in his bill. We are not taking any CENVAT credit for the same.

Query: 1. Shall we insist him to have ST registration number? Are we responsible for his act of not registering service tax?