Cenvat Credit

[Guest]

Dear All,

If service bill is 01.07.2011 and we take service tax credit but what implimentation if payment not done 31.12.2011.

is service tax credit reverse ...

if yes, Please send me notification about it. matter is urgent please help......

 

[Reshma kochar]

 

Hi Raj,

Here I have summarized some of the key clarifications issued vide the Circular (Circular No. 943/04/20 1 1-CX dated 29 April 2011 ), hope you may find it useful.

 

Point of Cenvat credit

Cenvat credit will be allowed on “receipt of invoice” as against on “payment of value of taxable service along with service tax”. It is also provided that if payment of value of input service and service tax thereon remains unpaid for 3 months from the Invoice date, the amount of credit initially availed needs to be paid. The amount so paid will be subsequently available as credit upon payment of value of input service and service tax thereon.

Where  service tax is payble under reverse charge, the Cenvat credit will be allowed only upon payment of value of input service and service tax thereon.

As a transition provision, for invoices  issued prior to 1 April 2011, Cenvat credit will continue to be available upon payment of value of input service and service tax thereon.

 

Please update me for next...

 

Thanks,

Reshma.

[BHARAT PUROHIT]

DEAR SIRS

 BEST WAY TO FOLLW IS EARLIER PRACTICE: TO TAKE S. TAX CREDIT AFTER MAKING PAYMENT.

 IT WILL BE HASSEL FREE AND U WILL NOT FACE ANY PROBLEM WHILE AUDIT.

 THNX/ B.B.PUROHIT

[RAMNIRANJAN KANDOI]

Dear,

It is always better to avail credit after payment of the Bill because otherwise at the time of Audit,checking willbe required to be done ,whether payment is made in 90 days time.

RMKandoi

AI Summary

Cenvat credit on receipt of invoice allowed; unpaid invoices require reversal until payment, impacting reverse charge credits. Cenvat credit is allowed on receipt of invoice, not on payment; if the value of the input service and service tax remain unpaid beyond three months from the invoice date, the credit taken must be paid back and can be re availed only after payment. For services under reverse charge, credit is allowable only upon payment of the input service value and the service tax.