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Import of services

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25 June 2015 Dear Friends





Can Importer claim cenvat on service tax paid by him under full reverse charge on services imported by him?





I think importer can claim cenvat but i need to know which rule or sub rule of Cenvat Rules says this.





regards

25 June 2015 Rule 3 r.a.w clarification given in F.No.354/148/2009-TRU dated 17.7.2009.

25 June 2015 sir where in rule 3


I couldn't find





25 June 2015 sir rule 3 says provider of output service can take cenvat but in this case importer is receiver of service


25 June 2015 ok I read F.No. 354, importer will be deemed as service provider.


But sir I need to ask you that liability of importer to service tax will arise when he makes payment to the party he imported from as per rule 7 of point of taxation rules.

that's ok

now as per proviso 1 to rule 4(7) of cenvat credit rules importer will be allowed cenvat credit after he pays service tax.


my question is that when as per rule 7 of point of taxation rules the importer tries to raise hi service tax liability in books by crediting service tax what will he debit because as per rule 4(7) he cant take cenvat credit unless he pays service tax, so we cant debit input service tax.


so at the time of raising service tax liability which account will importer debit in his books?


thanks



26 June 2015 1. April,1

Import service Dr 100.00
ST Input Dr 12.36
To A 100.00
" ST Payable 12.36
(Being import of service and ST theron
under RCM booked)

2. April, 25

ST Payble Dr 12.26
To Bank 12.36
(Being ST paid under RCM)

3. April,30

B Dr 224.72
To Out put service 200.00
" ST Collection 24.72
(Being out put service and ST
thereon booked)

4. May, 5

ST Collection Dr 24.72
To ST input 12.36
" Bank 12.36
(Being ST due for April paid after availing
CENVAT credit)



29 June 2015 Dear sir


thanks for the entries


I have a question to ask you.


there is a difference between availing and claiming cenvat.


we avail cenvat when we as a service receiver receive invoice from service provider.


we claim cenvat we set it off against output service tax.


am I right?


if yes, then please read the rest.


Proviso to rule 4(7) says the following:

Provided that in respect of input service where whole or part of the service tax is liable to be paid by the recipient of service, credit of service tax payable by the service recipient shall be allowed after such service tax is paid.


what I need to know is that is proviso talking to restrict availing cenvat credit or restrict claiming cenvat credit?


thanks sir

30 June 2015 1) Your understanding is correct.

2) Proviso to rule 4(7) is to restrict claiming of cenvat credit.






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