Service tax

[SANJEEV kumar]

Dear Sir,

What is procedure of Service Tax Input Credit.

Sanjeev

[Mahir S]

Regarding procedure, If you are having excise/service tax registration, you can take credit of input service in your statutory records and utilize it for making duty payments. Such credit and debit of duty is required to be totaled and shown in the service tax returns, also the invoices on which input service credit is availed, are to be preserved.

You should take precautions on following few points, (refer Cenvat Credit rules 2004 for complete details) :-

You should be careful whether the input service credit you are taking is falling under the definition of input services as defined in the Cenvat Credit Rules, 2004

The inputs or out service should not be used exclusively in providing the exempted output service.

Input service credit is allowed only for those services which are used in providing output service.

On input services , Credit is allowed only after the payment is made for the input service.

Credit is required to be availed within specified time limit.

Total Payment under RCM is to be made before availing input service credit.

[Ganeshan Kalyani]

Nicely explained. Thanks Mr.Mahir S.

AI Summary

Input service credit procedure: eligibility, timing, documentation and payment conditions for using service tax credit.
Claiming input service credit requires registered taxpayers to record and utilize credit only for service tax liabilities, for services defined as input services and used in taxable outputs; credits must be supported by invoices, shown in returns, claimed after payment for the input service, availed within prescribed time limits, and, where reverse charge applies, only after discharging the payment under reverse charge.