ELGIBILITY OF CENVAT FOR SERVICE TAX PAID UNDER RCM

[Ramachandran Chandru]

Would like to know whether CENVAT credit is eligible for service tax paid under RCM category. If so, is there any time bar for taking credit of tax paid, like one year period applicable for Non-RCM category. Also, any time bar is applicable for payment of service tax under RCM category. In the event of service tax paid, without interest, after due date, whether credit can be taken for the same under RCM. Please clarify.

AI Summary

CENVAT Credit Eligibility Confirmed for Service Tax under RCM, Subject to One-Year Limit per Rule 4(7) CCR, 2004. The discussion addresses the eligibility of CENVAT credit for service tax paid under the Reverse Charge Mechanism (RCM). It is confirmed that CENVAT credit is eligible for service tax paid under RCM, provided payment is made to the government. While there is debate over a one-year time limit for claiming credit, Rule 4(7) of the CCR, 2004 suggests such a limit applies. Payment under RCM is due by the 5th or 6th of the following month. Credit can be claimed even if the tax is paid without interest, though the department may take action for non-payment of interest.