Service Tax Credit

[SURYAKANT MITHBAVKAR]

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.

AI Summary

Service tax credit re credit permitted after reversal when payment is later made, subject to statutory time limit restrictions.
The mechanism requires reversal of Cenvat credit where payment for an input service is not made within the prescribed period; once the payment is made the reversed credit may be re availed subject to other provisions. A separate statutory time limitation restricts taking credit after a cut off measured from the date of specified documents; administrative guidance states the limitation applies to first time credit and re credit after reversal is permissible when conditions are met, but audit risk remains where payment was intentionally deferred.