Can credit be claimed in part in different month?

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Prashant Vakharia (Querist)
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31 August 2010 We have paid total invoice amount but due to some mistake we initially utilised only Rs. 100 of service tax credit out of Rs. 500 and filed the return in June 10/

Now can we claim Rs. 400 in the month of August 10?

Aditya Maheshwari

Aditya Maheshwari (Expert)
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31 August 2010 yes u can do so.

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Gagan Agarwal

Gagan Agarwal (Expert)
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31 August 2010 yes you can utilise the balance amount during any of the next period. no restriction on time limit for utilising credit

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Prashant Vakharia

Prashant Vakharia (Querist)
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31 August 2010 I think there is some reasonable time limit of 1 year for utilising credit.

It may be noted that the Finance Act, 1994 does not prescribe a time limit within which service tax credit should be availed and utilised. However,in CCE v. Mysore Lac & Paint Works Ltd. [1991 (52) ELT 590 (T)] it was held that MODVAT credit has to be taken within in a reasonable period. Further the Supreme Court in the case of Government of India v. Citedal Fine Pharmaceuticals [1989 (42) ELT 515 (S.C)] in the context of recoveries under Rule 12 of the Medicinal & Toilet Preparation Rules 1956 observed ''In the absence of any period of limitation it is settled that every authority is to exercise the power within a reasonable period. What would be reasonable period, would depend on the facts of each case''.
Hence credit taken by an assessee, should be within a reasonable time, and such reasonable time within which to avail credit could be one year, in view of the analogous provisions of refund under section 11B of the Central Excise Act, 1944.. In any event, as far as 'utilisation' of such credit is concerned, it can be done at any time

Gagan Agarwal

Gagan Agarwal (Expert)
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31 August 2010 that reasonable time limit of 1 year is for availing credit. Once credit is availed, then there is no time limit for utilising the credit. Thanks

Prashant Vakharia

Prashant Vakharia (Querist)
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31 August 2010 yes, you are right

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