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

AI Summary

Payment basis choice: cash-basis service tax payment does not preclude claiming cenvat credit on accrual basis.
The payment-basis election for service tax is independent from the rules governing input cenvat credit; choosing to pay service tax on a cash basis does not prevent a taxpayer from availing cenvat credit on an accrual basis, provided the taxpayer satisfies the statutory eligibility and procedural conditions for claiming cenvat credit.