Impact of modified 'input service' definition

[felix ka]

Hai TMI experts,

my doubt is whether CENVAT Credit is available to a work contract entered in 2009 in the following back-ground.

• advance was paid in 2009 and work commenced.
• a supplimentary invoice for ST was raised after 1-4-2011
• work is still continuing
• it belongs to the specifically excluded category as per modified Rule 2(l) 

[YAGAY andSUN]

As per sub clause (bb) to Rule 9 ' a supplementary invoice, bill or challan issued by a provider of output service, in terms of the provisions of Service Tax Rules, 1994 except where the additional amount of tax became recoverable from the provider of service on account of non levy or non payment or short levy or short payment by reason of fraud or collusion or wilful mis-statement or suppression of facts or contravention of any of the provisions of the Finance Act or of the rules made thereunder with the intent ot evade payment of service tax. [Notification No 13/2011 -C.E.(N.T.), dated 31-03-2011].

1) Further, please be ensure that on the face of supplemetary invoice all the details pertaining to the total payment of taxable amount for that material period should be given and the Service Tax amount must be calculated on this amount.

 2) Also an annexure for (Bill wise details with amout)must be attached as a support.

3) Bonafide reason for not charging the Service tax at that particular period should be obtained from the Service Provider.  A strong reason to believe should also be given in this regard.

4) An undertaking/bank guarantee from the service provider that the service provider had not been issued a SCN by the department and he is not issuing supplementary invoice after getting the SCN.

 

 

[felix ka]

Thanks.

AI Summary

Supplementary invoice requirements determine CENVAT credit eligibility when service tax is billed after contract commencement. CENVAT Credit for a work contract billed retrospectively depends on compliance with supplementary invoice provisions: the supplementary invoice must state total taxable consideration and compute service tax, be supported by bill wise annexures, be accompanied by the supplier's bonafide reason for earlier non charging, and include an undertaking or bank guarantee that no departmental show cause notice exists and the invoice is not issued in response to such notice.