Credit of service tax paid under reverse charge

[Kaustubh Karandikar]

XYZ paid service tax under reverse charge on 05.07.17 against the liability for June’ 17 and claimed credit of the same in the ER – 1 Return for June’ 17. Is it the correct way or they should have claimed it through TRAN – 1? Excise audit party is objecting the same saying that they should have claimed through TRAN – 1. What is the correct legal position?

[Mahadev R]

Only way was to show it in either ER-1 or ST-3 return as there was no provision to show such credits of tax paid on RCM in July 17 in TRAN-1.

[KASTURI SETHI]

It is technical lapse. Relief is cock-sure but after facing the rigours of litigation and matter may travel up to Tribunal. No hope prior to that stage.

AI Summary

XYZ's Service Tax Credit for June 2017 Disputed: ER-1 vs. TRAN-1 Filing Methods Examined XYZ paid service tax under reverse charge for June 2017 on July 5, 2017, and claimed credit in the ER-1 Return for June 2017. An excise audit party objected, suggesting the credit should have been claimed through TRAN-1. One respondent stated that the only option was to show it in the ER-1 or ST-3 return, as there was no provision for such credits in TRAN-1 for July 2017. Another respondent noted it as a technical lapse, suggesting relief is possible but may require litigation up to the Tribunal stage.