Respeted Sir/s,
In our case, we have to pay Royalty on Sale to In Korea and commission on Guarantee. This is our liability to deposit the Service Tax on the Remitted amount.
1. Is service tax applicable on Commission on Guarantee.
2. Can we adjust the Liability from our Cenvat credits.
3. If we have to deposit the Sevice Tax then can we take the Cenvat Credit of the Service Tax deposited.
Please clarify.
Best Regards.
Pradeep Kaushik
Debate on Service Tax: Reverse Charge on Commission, Cash Payment Requirement, and CENVAT Credit Use Explored A discussion on a forum addresses the applicability of service tax on royalty and commission on guarantee, and the use of CENVAT credit for these payments. Participants clarify that service tax is applicable under reverse charge for commission on guarantee, which must be paid in cash and not adjusted against CENVAT credit. However, the tax paid can be claimed as CENVAT credit if it qualifies as an input service. One user raises a concern about interest on service tax paid via CENVAT credit, with responses indicating that payments made this way are not recognized as tax, necessitating cash payment and interest. (AI Summary)
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