Credit on Advocate services rendered for Closed Office premises in dispute

[Ravinder Guleria]

Dear Sir,

Shall we take service tax credit on Reverse charge paid by us on Advocate services who is rendering Arbitration case against vacate of Office premises 3-4 years back. At that time we had sperate office and factory premises and had seperate Service Tax registrations.  But due to some reasons we have vacated the office and surrendered the registration and shifted to factory itself. We have all the registration, incl. Service Tax, Excise &  other regn. My question is whether we can take credit on these services currently.

[Madhukar N Hiregange]

If you area manufacturer then eligibility would be strong. If service provider then if used in providing output service would have to be established. Maybe difficult.

[YAGAY andSUN]

Dear Iyer,

Though there is no time limit prescribed in the Finance Act, 1994 to avail the CENVAT credit on Input services, but there are certain judgments which enumerate that CENVAT credit should be availed within reasonable time and in some judgments it is determined that 1 to 1.5 years are the reasonable time to avail such credit.

In addition to the above, CENVAT credit should be availed under the provisions of CENVAT credit Rules, 2004 as amended from time to time.  If you can prove the nexus with your manufacturing activities and with output services, then, you may avail the same, otherwise not.

Regards

Team YAGAY & SUN

(Management and Indirect Tax Consultants)

AI Summary

Eligibility for Service Tax Credit on Advocate Services Under Reverse Charge: Key Points and Timeframe Considerations A user inquired about the eligibility to claim service tax credit on reverse charge paid for advocate services related to an arbitration case concerning vacated office premises. The query arose after the office was closed, and the business shifted to a factory with separate service tax registrations. One response suggested that manufacturers have a strong eligibility for such credits, while service providers must establish a connection to output services. Another response noted that although the Finance Act, 1994 does not specify a time limit for claiming CENVAT credit, judgments suggest a reasonable timeframe of 1 to 1.5 years.