Cenvat

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

02 October 2012 Respected Sir,

Can we avail credit of Service Tax paid in Reverse Charge Mechanism ???

i.e. We have purchased goods from outside the state and Freight/Transportation is Rs. 20000
And we are paying Service Tax on 618 on that bill...

Now can we Get Credit of that Service Tax ???

Or we should expense out the same ??

Kindly note that Service Provider have no Service Tax No.

Kindly do reply as early as possible.

Thanking you in advance..

CA SHRINIVAS

CA SHRINIVAS (Expert)
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02 October 2012 Dear,
As you have no service tax registration as of now it means that your business is not the service tax liable business, in that case you cant take the credit of the same, and the same is required to be expensed out in the books.

Also where will you take the credit as you dont file the return to take the credit.

You also cant utilise it, as you dont have the liability to pay Service Tax in ordinary course....

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CA Suresh Jain

CA Suresh Jain (Expert)
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02 October 2012 What is you business and activity
2. are you registered under service tax
2. how did you get calculation of ST 618 on a bill of 2000
As per rule CENVAT credit against service tax paid under RCM is available

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Querist : Anonymous

Querist : Anonymous (Querist)

02 October 2012 Sir,

Service Provider doesn't have service tax registration.

We are registered under service tax.

Co. is Manu. of Brass Components & which is excise able unit as well.

My Que. is Can We avail Credit of Service Tax Paid in Reverse Charge i.e. 20000*12.36/100*25%.
Which comes to Rs. 618. ??

Thanks for Reply but plz do me a favor and again clarify the doubt..

CA Suresh Jain

CA Suresh Jain (Expert)
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03 October 2012 Yes, you can avail CENVAT against the service tax paid by you under RCM even if the tax is paid on abated value.

The doubt arises only because of the condition of abatement notification condition which provides that no CENVAT credit should have been availed by the service provider. In this case the condition of service provider not availing CENVAT is satisfied and therefore it is lawful to take CENVAT

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