Cenvat credit on reverse charge

[yateen vyas]

Sir we have taken a service under works contract.Invoice is raised by SP on 24-09-2016 for 50 % payment we have made payment on 31 march 2017,we have not paid our 50 % payment on GR-7 till date due to some issue.

Now i want to ask that can we eligible for avail cenvat credit on SP bill where we have paid amount with Service tax and what about 50 % GR -7 payment credit on it can paid in later date and avail cenvat credit.

Rgds

Yateen vyas

[Himansu Sekhar]

Yes you can take the credit on sp bill as this is a document under rule 9 of CCR. After you make the payment for the rest amount you will take the credit because you cannot generate the challah if you do not pay.

[Himansu Sekhar]

To append to my earlier reply, you can past the amount later on for the rest amount, the bar of oner year will be counted from the date of the document.

[yateen vyas]

In reverse charge there is 180 days clause for payment either crdit has to reversed so it will apllicable to SP bill or on challan

[Himansu Sekhar]

This is when you do not pay and take the credit.

AI Summary

Cenvat credit on reverse charge: credit depends on payment and must be reversed if not paid within the prescribed period. Availability of Cenvat credit under reverse charge requires qualifying documentary evidence and payment; credit for partially paid invoices is claimable for the paid portion, while credit on unpaid instalments becomes available only after payment and required challan generation, and the one-year bar for claiming credit runs from the document date. Failure to pay within the prescribed period triggers an obligation to reverse any credit taken, which may apply to the invoice or the challan mechanism until payment and procedural formalities are satisfied.