Which amount can be taken as CENVAT CREDIT ??

[hardik thacker]

Sir,

We have received invoices stating therein service value and service tax.

suppose for any reason (for example : service value not as per work order or deduction made as per the terms of contract or partly recovery from employee for usage of mobile bills) we are paying less service value and accordingly service tax thereon.

Which should we taken as CENVAT CREDIT ??

Thanks..

[Rajagopalan Ranganathan]

Sir,

You are eligible to take credit of whatever amount you pay towards service tax. If you pay the service tax indicated in the bill then you are eligible to take the same amount as credit. Actually service tax paid by the provider of the service is the eligible amount of credit. You can alter the service value but you cannot alter the service tax paid by the service provider.

AI Summary

Cenvat credit entitlement follows the service tax actually paid by the provider, not adjustments to invoiced service value.
Cenvat credit is claimable only for the service tax amount actually paid by the service provider; reductions or adjustments to the invoiced service value do not change the tax paid, and the recipient's credit entitlement is limited to the tax discharged by the provider.