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

Cenvat credit on input services: allowed on invoice receipt, but reverse charge and non payment trigger required reversal and reinstatement.
Cenvat credit for input services is allowed on or after receipt of the invoice, bill or challan. If the recipient is liable to pay service tax under reverse charge, credit in respect of that tax is allowed only after the service tax is paid by the recipient. If payment to the service provider (value and tax as per the invoice) is not made within three months of the invoice date, the recipient must pay an amount equal to the Cenvat credit availed on that input service (excluding credit equal to tax already paid under reverse charge); upon such payment the recipient may re avail the equivalent credit subject to other provisions.