Credit of Input Service provided before 01.04.2011 but Service Tax Invoive raised in April'2011

[BrahmaputraCrackerandPolymerLimited AGovt.OfIndiaEnterprise]

In our organization, the works contract was awarded to a contractor for construction of Raw Water Reservoir and Product Warehouse during the year 2010.

The contractor started the works in November' 2010 and raised their 1st Running Bill in the month of February' 2011. We paid the subject running bill during the month of March' 2011.

The contractor raised their service tax invoice against the above service in the month of April' 2011 along with the deposit challan. The subject service tax invoice was paid in the month of May' 2011. We accounted the Service Tax Amount under CENVAT Claim at the time of payment. The return against this claim was filed in the month of January'2012.

The question is whether we have rightly availed the CENVAT Credit as there was a significant changes in service tax valuation rules in 2011 budget.

[DR.MARIAPPAN GOVINDARAJAN]

In my view you have rightly availed in the CENVAT credit.

AI Summary

CENVAT credit legitimacy affirmed where input services predated valuation change but invoice and payment occurred later. Input service was provided before 01.04.2011; the contractor issued a service tax invoice in April 2011 and paid service tax in May 2011. The purchaser availed CENVAT credit at the time of tax payment and filed the return in January 2012. The advisory reply concluded that the CENVAT credit was rightly availed despite valuation rule changes effective from 01.04.2011.