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Service tax querry

Nikhil Kanodia (Article Assisstant) (124 Points)

11 December 2012

Hi,

Please tell me about the cenvat credit available on payment of RCM liability as a reciever.

Whether entities that are allowed to take 100% cenvat (ie. other than banking & NBFC) can avail 100% cenvat on RCM liability in the month of payment Or it is to be taken as 50% in the month of payment & rest 50% in the subsequent month?

Please reply asap.

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7 Replies

satya (Executive Excise) (1839 Points)
Replied 11 December 2012

Cenvat Credit on RCM service basing on Provider's inovice providers liabilty amount, remaining part Receiver has to pay next month on or before 5th (for e-payment 6th), basing on GAR7 challan he will eligible to take cenvat credit from 7th onwards.

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Nikhil Kanodia (Article Assisstant) (124 Points)
Replied 11 December 2012

Full 100% is allowed in the month of payment or is it 50% in the month of payment and the rest in next month?

satya (Executive Excise) (1839 Points)
Replied 11 December 2012

How you will take 100% in the month of payment to Provider, we have to pay to the provider upto his liabilty only under RCM services.

Nikhil Kanodia (Article Assisstant) (124 Points)
Replied 11 December 2012

Hi,

Thank you for getting back.

I'am talking about the portion we have paid under RCM.

eg:- If we pay 50% in respect to works contract as a service reciever under Rcm on 5th Dec,12, then full 50%(ie. my 100%) I shall take in the month of December or shall I distribute it in two months ie. 25% (50% of 50%) in december and rest 25% in January?

aishwarya s raghavan (student) (224 Points)
Replied 11 December 2012

Mr.Nikhil,

You can take credit of the 50% of service tax that you paid in December, only in the subsequent month.

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satya (Executive Excise) (1839 Points)
Replied 11 December 2012

I am giving with example for easy understanding purpose;

If u have received Work contract service bill in the month of Dec'2012 under RCM ST liabilty is 50 (SP) 50(SR).

service value Rs.50,000/- ST 50% is 3090/-(SP) Provider giving bill 53,090/- after you receiving this bill you have to take 3090/-(100%) in the month of Dec'2012. after completing dec'12 you have to deposit your portion of ST liability Rs.3090(SR) thru GAR7 challan in Jan2013, after remitting this liabilty you will take that Rs.3090/- on the strength of GAR7 challan in the month of Jan'13 or subsequent months.

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Akhilesh Agarwal (Service) (49 Points)
Replied 12 December 2012

My query is we are a coloniser and sale only plots (not any construction in such plots) we are taking transfer charges from customers when plot will transfer from original buyer to second buyer. In this case transfer charges fees liable for service tax.

Akhilesh