service tax credit eligibility-reg

[Ramakrishnan Seshadri]

Dear Sir,

We are receiving invoices from our service providers and others under rcm also by charging service tax. On receipt of the invoices we will book the invoice and payment will be made immediately or after one month. Our question is whether service tax credit charged in their invoices can be taken immediately or credit to be taken only after payment to the service providers.

Please clarify.

Thanks

S.Ramakrishnan

AI Summary

Service tax credit can be claimed upon invoice receipt, but payment must be made within three months per Rule 4(7). A query was raised about the eligibility to claim service tax credit upon receiving invoices from service providers, specifically whether the credit can be claimed immediately or only after payment to the providers. One respondent clarified that the credit can be claimed upon receipt of the invoice, provided payment is made within three months. Another respondent referenced Rule 4(7) of the CENVAT Credit Rules, 2004, which allows credit upon receipt of the invoice but requires payment within three months to retain the credit. A third respondent confirmed the accuracy of these explanations.