Utilisation of Cenvat credit against service tax payable on advance receipts-reg

[N Balachandran]

Sir

This is regarding the service tax payable on Advance payment  received.  I need to have the clarification on the following:-

1. Can we adjust the CENVAT credit against the Service tax payable on advance payment received against the taxable services to be rendered.

2  When we render both the taxable and non taxable service ,  my understanding is that,  the service tax paid on input services can be utilised for payment of service tax on taxable services as given below:

a) The input services which is exclusively used for taxable output servicees,  The entire service tax paid on input services are eligible for input credit and the same can be adjusted against the tax payable on output servies.

b) The input services which is exclusively used for non taxable services, the entire service tax paid on input services are not eligible for input credit and the same can not be adjusted against the tax payable on other taxable services

c) The input services which is used as common input services, the service tax paid on the same can be taken proportionately and utilise for the payment of service tax on output services.

Pl clarify, the above is in line with the provisions of service tax rules.

3) I am rendering the following services :

    a) Consultancy services

    b) Erection services

   Discharging the service tax liablity @12.36% from 01.04.2012.

  My question is:

1. The service tax paid on input service ( Consultancy services ) avaiable excess now, Is it possible to adjust the cenvat credit against service tax payable on Erection services

I shall be thankful if you could clarify my question one by one.

Regards

N.Balachandran

 

 

AI Summary

CENVAT Credit Can Offset Service Tax on Advance Payments; Excess Credit from Consultancy Applicable to Erection Services A participant inquired about the utilization of CENVAT credit against service tax payable on advance receipts for taxable services. They sought clarification on whether CENVAT credit could be adjusted in scenarios involving both taxable and non-taxable services, and specifically if excess credit from consultancy services could be used for erection services. The response confirmed that CENVAT credit could indeed be adjusted against the service tax on advance payments and that excess credit from one service type could be used to pay service tax on another taxable service.