SET OFF SERVICE TAX WITH PAYABLE AND RECEIVABLE SERVICES

[Guest]

We are a limited company with around 7 crore turnover.

We are service provider providing Manpower Recruitment services as well as Packaging services. We have a liability to pay service tax for August 2012 services rendered.We have established a project where we are taking installation services, maintanence services for our machinery installed. This amount comes to us around 196000.  Now, my question is can we take set off of service tax payable against services tax receivable  ?

If yes, how do we have to show for service tax filling.

MITESH SHAH

98242 13723

[YAGAY andSUN]

As per the provisions of CENVAT credit Rules, 2004 you may avail the CENVAT credit and adjust it with your output liability as there is no requirement to show the one to one correlation.

AI Summary

CENVAT credit may be adjusted against service tax output liability without a one-to-one correlation, under CENVAT rules. Under the CENVAT credit mechanism the tax paid on input services such as installation and maintenance may be availed as credit and adjusted against the provider's output service tax liability; there is no requirement to demonstrate a one-to-one correlation between a particular input service and a specific output service, subject to compliance with the conditions and procedures of the CENVAT credit rules.