Cenvat Credit in case of Reverse Charge Mechanism

[Dhirendra Srivastava]

Dear Professional colleagues, My Query is regarding Payment of Service Tax Under Reverse Chage Method. I can understand that Service in relation to which Service Tax under reverse charge is paid cannot be treated as output service, But can we treat it as input service. For examsple can we use the Service Tax paid under reverse charge for payment of Service Tax? Excise Duty.

AI Summary

Reverse Charge Mechanism: Service Tax Paid by Recipient Qualifies as Input Service Credit Under Cenvat Credit Rules, 2004. A discussion on the applicability of Cenvat Credit under the Reverse Charge Mechanism in service tax involves a query about whether service tax paid under reverse charge can be treated as input service. Three responses clarify that service tax paid by the service recipient under reverse charge can indeed be treated as input service credit. This is because the recipient effectively performs the role of the service provider by paying the tax, and thus, the credit can be utilized according to the provisions of the Cenvat Credit Rules, 2004.