Setting Off Service tax payable against Input Service Tax Credit

[Asked by Guest]

My input service tax credit amount is more than the actual service tax payable by me.  I am not sure whether I can set off the entire service tax payable against my input service tax credit (some people are advising me that there is a cap on setting off input ax credit in terms of %age).  As every month my input service tax credit is more than the actual service tax payable, please advise me as to what amount I can set off and what is the mandatory tax payable.

 

thanks and regards,

Sivakumar S

[YAGAY and SUN]

Please check the following aspects, namely:

1. Whether you are availing the CENVAT credit on the Input Services as per the amended definition of the the Input services or not?
2. Whether you fall under the catergory of Inflated Service Tax i.e. Tax on input services are more than of output services?
3. Whether there is any export of services?
4. Whether you had applied for exemptions and refund for the input services under the provisions of export of services or not?

[JAMES PG]

Claiming abatement for  payment of Service Tax and availing Cenvat credit, carrying on  Trading activity  also to be looked into.

AI Summary

CENVAT credit treatment: verify eligibility, abatement and export/refund implications before setting off input credit against service tax payable.
Where input service tax credit exceeds service tax liability, assess entitlement to CENVAT credit before assuming full set-off; verify input-service definition, whether inputs exceed outputs (inflated service tax), and whether abatement claims, trading activities, or export/refund elections affect availability and procedural entitlement to retain, refund, or set off the credit.