STax payment from CENVAT / Cash

[CA AJAY KUMAR AGRAWAL]

Dear experts,

Can anybody describe in detail whether in any case payment under RCM & against declared services can be made from Cenvat Credit ?

AI Summary

Cenvat Credit cannot be used for service tax under Reverse Charge Mechanism; cash payment required per Rule 2(p). A user inquired about the possibility of using Cenvat Credit to pay service tax liabilities under the Reverse Charge Mechanism (RCM) and declared services. Experts clarified that service tax liabilities under RCM cannot be paid using Cenvat Credit and must be settled in cash. They further explained that according to Rule 2(p) of the Cenvat Credit Rules 2004, services where the recipient is liable for the entire service tax cannot be considered 'output services,' thus requiring cash payment. The discussion concluded with confirmations and thanks for the clarifications provided.