We are receiving various Input services against which we are taking CENVAT credit only after actual payment to the service providers. During the Excise Audit we have been asked to collect the documentary evidence of some of the service providers, whether they have deposited the Service Tax payment to the Government treasury within three months of time, otherwise the credit taken by us is denied.
Is there any provision in Cenvat Credit Rule? As per my knowledge, credit should not be denied if the service providers are collected the service tax & not deposited to the Government treasury. Is there any change in the credit Rule? Kindly clarify.
Regards,
VINAY
CENVAT Credit: No Denial If Service Providers Delay Tax Deposit; Focus on Invoices and Payment Records Instead. A user inquired about whether CENVAT credit can be denied if service providers do not deposit service tax to the government within three months. One respondent referred to a notification stating that credit is available upon receipt of an invoice if payment is made within three months, with amendments allowing credit on supplementary invoices except in non-bonafide cases. Another respondent clarified that there is no requirement to provide documentary evidence of service tax payment by the provider, suggesting that the audit's query may relate to invoice issues or payment records, and advised understanding the department's perspective. (AI Summary)
TaxTMI 
TaxTMI 
