Cenvat credit availability for unregistered dealer

[Asked by Guest]

We are providing business auxiliary service and we have been forced to pay service tax since 10-09-2004 while we got registered with service tax department only in current financial year i.e. 2006-07. Now what kind of returns do we need to file. Can we claim Input & Cenvat for prior period also for which we have no registration but law was applicable to us for payment of service tax. Also because of this we have to raise supplementary bills to our customers for payment of service and current bills are being issued along with service. Few customers have paid current service tax but are denying to pay previous dues. In this case what is our liability. Some of the customers are not paying anything (neither the previous dues of service nor the exactly service tax portion of current bills), in this case what is our liability.

[Surender Gupta]

Since you are compled to pay service tax for the period starting from 10-09-2004, you are entitled to claim the cenvat credit on the inputs, capital goods and input services utilized for providing the output services on which you are paying service tax now. You can take the credit now while paying service tax. However, law does not support you to collect the service tax from your customers. It is a pure service agreement. If your customer is not ready to bear the burden, there is no option, you have to pay from your own pocket.

AI Summary

Cenvat credit: unregistered providers can claim credit for inputs despite late registration; cannot force customers to pay past service tax.
Providers required to pay service tax from the date liability arose may claim cenvat credit on inputs, capital goods and input services used in supplying the taxable services even if registration occurred later; the credit can be taken when paying service tax. The law does not permit collection of past service tax from customers absent a contractual right, so unpaid customer refusals leave the provider liable.