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POINT OF TAXATION

RAHUL MALHOTRA

Hi

My question is regarding Rule 7 of Pot Rules. As per amended Rule 7 if in previous year quantum taxable services were less than 50lacs than one can pay service tax liability on cash basis irrespective of service provided. Now my question is if I am paying service tax on cash basis, could I take benefit of input  cenvat credit on accrual basis??

Regards

Rahul

09810267888

Can You Pay Service Tax on Cash Basis and Claim Cenvat Credit on Accrual? Rule 7 Clarified A participant inquired about the applicability of Rule 7 of the Point of Taxation Rules, specifically whether one can pay service tax on a cash basis if their taxable services were below 50 lakhs the previous year, and still avail input Cenvat credit on an accrual basis. A response clarified that the rules for service tax payment and Cenvat credit are distinct. Paying service tax on a cash basis does not affect the ability to claim Cenvat credit on an accrual basis, provided the conditions of Rule 4(7) of the Cenvat Credit Rules, 2004 are met. (AI Summary)
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