We have booked professional fees bill for our consultant but payment will made on after one year period. While taking service tax credit we are assuming date of payment to consultant which is current.
The above case the service tax credit is availed after one year from the date of invoice issued by consultant but immediate after payment made to consultant.
Please advise whether the above credit is permissible under rule of service tax credit.
Service Tax Credit Must Be Availed Within One Year of Invoice Date Under Rule 4(7), Cenvat Credit Rules 2004. A query was raised regarding the permissibility of availing service tax credit one year after the invoice date, following payment to a consultant. Responses highlighted that, according to Rule 4(7) of the Cenvat Credit Rules, 2004, credit must typically be taken within one year of the invoice date. If payment is delayed beyond three months, initially availed credit must be reversed and can only be reclaimed upon payment. Discussions referenced a circular clarifying that re-credit is possible after meeting conditions, but concerns about potential audit objections were noted. The conversation emphasized the complexity and potential for argument in such cases. (AI Summary)
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