Service Tax on reverse charge method - reg.

[vinay wakde]

Our company is member of Sponge Iron Manufacturers Association(SIMA), New Delhi.  During this month we have given Rs. 1,00,000/- towards sponsorship service to SIMA.   The service Tax is payable @ 12.36% by the service recipient under R.C.method on Sponcership Service w.e.f. 01.07.2012.  Kindly let us know whether we are eligible to take Input service credit on the strength of Bank challan or not?

Regards,

VINAY

 

AI Summary

Eligibility to Claim Input Service Credit for Sponsorship Payments under Cenvat Credit Rules, 2004 Explained A company, a member of the Sponge Iron Manufacturers Association, inquired about the eligibility to claim input service credit for a sponsorship service payment of Rs. 1,00,000 made to the association, with service tax payable at 12.36% under the reverse charge method effective from July 1, 2012. The response indicated that, generally, the service recipient can avail credit for the entire tax paid, based on the tax payment challan, subject to compliance with the Cenvat Credit Rules, 2004.