Cenvat credit of service tax

[CA.ANCHAL RASTOGI]

A PUBLIC LIMITED COMPANY ENGAGE IN PRODUCTION OF EXCISABLE ITEM, USE SERVICES OF VARIOUS CONTRACTORS / JOB WORKERS / MANPOWER SUPPLIERS ETC. THESE SERVICES PROVIDRS CHARGE SERVICE RAX FROM US BUT DO NOT DEPOSITE. ON OTHER HAND WE TAKE CENVAT OF THOSE AMOUNT OF SERVICE TAX. 1. WHAT IS THE LIABILITY OF COMPANY? 2. CAN S T DEPT TAKE ANY ACTION AGST COMPANY (SERVICE USERS) 3. WHAT SHOULD COMPANY TAKE ACTION / PRECAUTION TO PROTECT THEMSELF?

AI Summary

Company Risks Claiming Cenvat Credit on Undeposited Service Tax; Advised to Educate Providers or Withhold Reimbursement. A public limited company involved in producing excisable items uses services from contractors and manpower suppliers who charge service tax but do not deposit it. The company claims Cenvat credit on this service tax. The query seeks to understand the company's liability, potential actions by the service tax department, and precautions to protect itself. The response advises the company to either educate the service providers about compliance or refrain from reimbursing the service tax amount, as claiming Cenvat credit under these circumstances could be risky.