Service Tax

[Gopal B]

Dear Sir,

We r  getting security services and provider collecting 25 percent from us and paying the Dept.and balance 75 percent paid by us to the Dept.. Now  my question is shall we claim credit of total 100 percent or only 75 percent ? Pls clarify. 

Thanks

AI Summary

Clarification on CENVAT Credit: Users can claim 100% credit for security services under reverse charge, with specific exceptions. A user inquired about claiming CENVAT credit for security services, where 25% of the service tax is collected by the provider and 75% is paid by the user to the department. Respondents clarified that 100% credit can be availed: 25% based on the security agency's bill and 75% after payment to the department. Exceptions include cases where output services are tax-exempt or unrelated to input services. A request for legal references on reverse charge provisions was made, questioning the consequences of utilizing credit before departmental payment.