Tangible Good Service Tax paid by Receipient

[jagadesh kumar bhojanapalli Kumar]

X (service Provider) company is registered under service tax &  providing Equipment/machinery with operators/staff & maintenance all his account except diesel oil  to Y Company (Service Receipient) .

Service tax is paying by 'Y' company through challan in Bank   instead of service provider is acceptable or not as per provisions of service tax rules.

Y  company can avail above service tax credit or not. (Y Company has been registered under Central Excise & Service Tax -both). 

regards,

jagadesh 

[onkar kumar]

liability to pay Service tax is on the X. If it is being paid by 'Y' then it should be on behalf of 'X' and should be deposited on the the STC code of 'X'. There should be an invoice issued by 'X for this. Copy of challan/Receipts of payment made by 'Y' should be kept by 'X' and duly accounted and figured by 'X' in his ST-3.

[onkar kumar]

liability to pay Service tax is on the X. If it is being paid by 'Y' then it should be on behalf of 'X' and should be deposited on the the STC code of 'X'. There should be an invoice issued by 'X for this. Copy of challan/Receipts of payment made by 'Y' should be kept by 'X' and duly accounted and figured by 'X' in his ST-3.

[onkar kumar]

In case of above procedure "Y" will be treated as a tenderer only not as payee

[onkar kumar]

if above procedure is followed by "X', then "Y" will be entitled to avail cenvat credit

[NEERAJ KUMAR, RANCHI]

service tax paid by anybody quoting the STC of service provider is acceptable, no problem with that, but in such case credit can not be taken by "Y".

[onkar kumar]

If there is an invoice issued by ‘X’ in favour of ‘Y’ and service tax indicated on the invoice has already been deposited in favour of STC of ‘X’.  How can cenvat credit to ‘Y’ be disallowed? The conditions of cenvat credit rule to avail the cenvat credit is fulfilled now. Pl. make it clear.

Thanks

[NEERAJ KUMAR, RANCHI]

In such condition how this can be disallowed, this can not be, Subject to condition that invoice in favour of Y has been issued by X . In that case no matter who deposits the service tax quoting the STC of X. But I think we have a little deviated from the main intention of the question. In the query these aspects have not been mentioned, whether invoice inn favour of Y is being issued or not,

AI Summary

Service tax payment by recipient treated as payment on behalf of provider; credit requires provider invoice and STC deposit.
Service tax liability lies with the service provider; recipient payments are acceptable if deposited quoting the provider's STC and treated as payment on behalf of the provider. To avail Cenvat credit the provider must issue an invoice showing service tax and the deposit must be recorded under the provider's STC; without such invoice and accounting the recipient cannot claim credit and will be treated merely as a tenderer.