SERVICE TAX CREDIT UTILISE FROM CENVAT

[Asked by Guest]

Dear Sir ,

We are  manufacturing of  crane and also registered under Rule 9 of  Central Excise Rule, 2002 Similarly we are registered under Service Tax Rules vide under Section 69 of the  Finance Act, 1994. As per new service tax Rules effected on 01.07.2012 all services are covered on negative list & other than negative list of services. As on date our regular services are as follows:-

1.Goods Transport by Road(Reverse charge mechanism)
2.Erection, Commissioning & Installation
3.Consulting Engineer
4.Renting of Immovalble property
5.Supply of Tangible Assets for use(i.e. Plant & Machinery)
6.Others means: Payment against Input services(reverse charge & Joint charge mechanism)

In this  case our normal practice & as per my knowledge is that service tax liability paid through GR-7 challan(Cash) & credit on input services are used against clearance of finished goods liability. Now our question is that can Cenvat credit/service tax credit be utilized for payment of service Tax on above mentioned service tax liability. Our Internal auditor is advised to us for above services payment of service tax liability can utilized from service tax credit/Cenvat credit Account.

Kindly give your valuable suggestions for the above subject matter.

With Best Regards,

SNEHAL SHAH

AI Summary

Cenvat credit utilisation: input service credit may fund service tax liabilities except those under the reverse charge mechanism.
Input service credit may be utilised to pay excise duty on finished goods or to pay service tax on provision of taxable services, but such credit cannot be used to discharge service tax liabilities arising under the reverse charge mechanism; utilisation and conditions are governed by the CENVAT Credit Rules.