Service Tax Credit and Utilised

[HITENDRA DAVE]

Dear  Sir

please advice we are manufacturing  unit and taking cenvat credit on input services  and  same shown in ER-1  my Question is , shall we  adjust the output services tax against input services  tax and show the same in monthly and yearly service tax return  and ER-1

 

[YAGAY andSUN]

There are certain output services and their service tax liability needs to be paid through Cash Payment/GAR-7.  Before adjusting the input service tax  towards each and every  output service tax, please consider this aspect also.

[Ramanujam Varadarajan]

Once an eligible Cenvat credit is availed, there is no restriction in its utilisation against service tax liability of any of the OUTPUT SERVICES rendered.

AI Summary

Cenvat credit utilisation can be applied against any output service tax, subject to cash-payment requirements for specified services. Once an eligible Cenvat credit on input services is lawfully availed, it may be utilised to discharge the service tax liability on any output services rendered; however, where an output service liability is mandatorily required to be paid in cash through the prescribed mechanism, that component must be discharged by cash (for example through GAR-7) and cannot be adjusted by credit. Taxpayers must identify such cash-payment obligations and otherwise apply Cenvat credit in returns and ER-1.