Cenvat credit on reverse charge

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

04 May 2015 I want to know whether we have to disallow proportional credit of service tax paid under reverse charge in accordance with Rule 6(3)(ii).
I understand that service tax credit can be taken in accordance with Rule 3 of Cenvat credit rules, but is does not mention the reverse charge. So whether we can take full credit of service tax paid under reverse charge and ignore the proportionate reversal in accordance with Rule 6(3)(ii) for case of providing both taxable and non taxable services.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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04 May 2015 You can't take full credit of service tax paid under reverse charge, proportionate reversal is required as per Rule 6(3)(ii).
Rule 3 of Cenvat credit rules applicable to reverse charge also.