Clarification regarding availment of credit on input services - reg

CENVAT credit on input services permitted when accounting entries or settled payments constitute payment, subject to tax actually paid.

Clarification explains that when substantive law treats book adjustments as constituting the gross amount charged, such adjustments qualify as payment for claiming CENVAT credit; credit is allowable where service charges and corresponding service tax are treated as paid and the tax has been paid to the government account. If the finally settled payment is less than the invoiced amount due to discounts or deductions, the invoice is treated as amended and credit is limited to the service tax actually paid, with subsequent refunds or extra payments requiring corresponding adjustment.