Cenvat Credit on setting up services Pre Mar 11

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Ankit Maheshwari (Querist)
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28 April 2011 If an service related to the seeting up of business premises was provided before 31 Mar 11 but invoice is received after 31 Mar 11. Can the Service tax credit can be taken on the payment of the invoices on the ground that provision of service is already completed befoe 31 mar 11.

Pravin Kumar Karn

Pravin Kumar Karn (Expert)
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28 April 2011 There is other confusion also in this matter.

Cenvat credit rules have not been amended to allow credit on accrual basis. So legally position is that we have to pay service tax on accrual basis and we are allowed to take credit on payment basis.

Anoop Gupta

Anoop Gupta (Expert)
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28 April 2011 I think the CENVAT Credit Rules have been amended by virtue of notification no. cent 13/2011. Now CENVAT Credit can be avaialed on the date of reciept of invoice/bill.
As regards the query, I want to clarify that since services of setting up of business are provided before 31st March 2011 the credit of the same should be allowed, if the date of the invoice is before 1st April 2011.

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