TaxTMI 
TaxTMI 
SIR I AM WORKING IN LIMITED COMPANY AND IN MY COMPANY HAVING NO OUT PUT SERVICE BUT PAYING SERVICE TAX UNDER REVERSE CHARGES MECHANISM AND OTHER INPUT SERVICES . WHETHER I CAN UTILIZE THE CENVAT PAID ON OTHER INPUT SERVICES AGAINST PAYMENT UNDER REVERSE CHARGES MECHANISM.
CENVAT CREDIT
09 Aug 2016 
6 Replies 
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Cenvat credit cannot discharge reverse charge service tax liability; RCM payments must be made in cash.
Service tax payable under the reverse charge mechanism must be paid in cash and cannot be discharged using cenvat credit; manufacturers may avail cenvat credit on input services and utilize it against excise duty on output goods, whereas traders cannot claim such credit. Certain services (for example rent-a-cab) are ineligible for credit, while works-contract services related to repair or maintenance of factory/office assets may qualify for credit. (AI Summary)
Service tax payable under the reverse charge mechanism must be paid in cash and cannot be discharged using cenvat credit; manufacturers may avail cenvat credit on input services and utilize it against excise duty on output goods, whereas traders cannot claim such credit. Certain services (for example rent-a-cab) are ineligible for credit, while works-contract services related to repair or maintenance of factory/office assets may qualify for credit. (AI Summary)