Cancellation of Serviec Tax Invoice

[Guest]

Sir,

We have received Service Tax Invoice in 2014. we have not cleared the invoice and service Tax was not paid to the Service provider due to some disputes, but the Service provider had shown the particular Invoice as his turnover and paid the Tax liability in his Service Tax return. Now the dispute was settled. Can we cancel the Invoice and clear it and avail Cenvat credit because the period of 1 year was lapsed and no credit will be available on that Invoice.

[Rajagopalan Ranganathan]

Madam,

You have to take the credit within one year from the date of invoice vide third proviso to rule 4 (1) of Cenvat Credit Rules, 2004. If you fail to make payment to the service provider within 3 months from the date of invoice you have to reverse the credit taken. You can take back the credit when finally payment of the amount indicated in the invoice including service tax paid/payable is made to the service provider vide second proviso to sub-rule 7 of rule 4 of Cenvat Credit Rules. In my opinion you cannot cancel the original invoice and raise a fresh invoice to avoid the condition that credit should be taken within one year from the date of invoice.

[KASTURI SETHI]

Invoice can be cancelled by the service provider who issued the invoice . I support the views of Sh.Ranganathan , Sir.

[DR.MARIAPPAN GOVINDARAJAN]

In my view also the invoice cannot be cancelled.

[Himansu Sekhar]

Even it is assumed that the invoice can be cancelledvafter lapse of one year, the ground of cancellation should have a genuine ground. Not for enabling somebody for taking the credit.the service provider cannot issue another invoice when they have pasidvthe tax.

[Ganeshan Kalyani]

Tampering with invoice document is not allowed.

[Guest]

Thank U Sir,

Whether time limit of One year is not applicable for those invoices in which credit is taken but reversal is done due to non payment of the invoice amount to the Service Provider.

[Himansu Sekhar]

Yes board has clarified

[Himansu Sekhar]

Please refer the circular 990/14/201-cx8 dated 19.11.14

[Himansu Sekhar]

Also refer to the article o Sri M.M.Govindarajan on this subject

AI Summary

Cenvat credit time limit prevents reclaiming input credit after the prescribed period unless payment and reversal conditions are satisfied. Cenvat credit must be taken within one year from the invoice date; failure to pay the provider within three months requires reversal of credit. Credit can be restored when payment of the invoice amount including service tax is finally made to the service provider. Cancelling and reissuing invoices to evade the one year limit is not an acceptable method, and cancellation after tax payment or tampering with invoice records is impermissible.