Service receiver paid service tax to provider but he has not paid to goverment

[Guest]

Dear Sir,

We are paid an invoice value with service tax to service provider. But service provider will not paid service tax to service tax department.

In this case we can take a service tax credit or not??

Please explain.

Thanks & Regards,

Sanjay Vasava

[Mahir S]

Sir,

Please refer sub rule (7) of rule 4 of Cenvat Credit Rules, 2004 , which is self explanatory.

[Ganeshan Kalyani]

If you have paid the tax to the service provider then you are eligible to tax credit based on invoice.

[DR.MARIAPPAN GOVINDARAJAN]

You can take credit on the service tax irrespective of the fact whether the service provider pays the service tax with the department or not. But this position will be in the reverse in the GST regime.

[Ganeshan Kalyani]

Only when supplier pays the tax the recipient will be able to take the credit .

[YAGAY andSUN]

Collecting Service tax from the service receiver but not paying to the Government is an offence. However, you can avail the CENVAT credit.

AI Summary

Can a service receiver claim CENVAT credit if the provider fails to remit tax? Insights from Cenvat Credit Rules, 2004. A service receiver paid service tax to a provider who did not remit it to the government. The receiver inquired whether they could claim a service tax credit. Responses varied: one cited Cenvat Credit Rules, 2004, indicating eligibility for credit based on the invoice; another stated credit could be taken regardless of the provider's payment status, though this would change under GST. It was noted that the supplier must pay the tax for the recipient to claim credit, and failing to remit collected service tax is an offense, yet CENVAT credit is still available.