CENVAT Credit on Work Contract service tax paid under Reverse Charge Mech.

[Rakesh K Paliwal]

Dear All,

I want suggestion on the above subject matter that , as we are paying service tax 50 percent on work contract service on various valuation like 40 percent , 70 percent and 60 percent of value of bills  under reverse charge, so can we take CENVAT on which category of payments agains after payments of ST.

Please advise, and give referance of that in rules/notification.

 

Regards

Rakesh K Paliwal

 

AI Summary

CENVAT credit on work contract services: credit on recipient's challan and invoice, subject to payment and use restrictions.
CENVAT credit for service tax on work contract services paid under reverse charge is claimable on the challan for tax paid by the recipient; credit for the portion charged by the provider is claimable on receipt of the provider's invoice but must be reversed if the recipient fails to pay the invoice within three months (per the second proviso to Rule 4(7)); Rule 9(1)(e) and 9(1)(f) prescribe the challan and invoice/bill as supporting documents. Credit is admissible only where the output is Work Contract Service or Construction Service and cannot be used by a manufacturer to offset excise duty.