Cenvat credit on the document, which doesn't show the tax

This query is : Resolved

A. Kiran Kumar (Querist)
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30 March 2009 Some of the invoices issued by the service providers, don't show the Service Tax payable seperately. Instead it is mentioned in the invoice that "the above charges are inclusive of Service Tax @ 10.3%."

The department is denying cenvat credit on such document, as the invoice should contain the Service Tax payable seperately as per rule 4A of STR,1994.

My query is whether the word "The service charges are inclusive of Service Tax" is enough to avail the Cenvat Credit. Please clarify my doubt with relevant provision.

Thanks in advance.

Dayal

Dayal (Expert)
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31 March 2009 The department is right in denying the credit.

you can now ask your service provider to reflect the same in the invoice and which shall be countersigned for such corrections.

Rule 4 is very clear on this element of tax being shown separately in the Invoice.

Please ask the service provider to rectify the mistake with proper stamp and sign to avoid diallowance of same

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A. Kiran Kumar

A. Kiran Kumar (Querist)
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01 April 2009 Thank you so much Mr. Dayal

But as per Section 67(2)of Finance Act, 1994, the cum-tax value may be acceptable. The same is reproduced below for your ready reference.

I request you to check the below provision, whether it supports my contention.

"Where the gross amount charged by a service provider, for the service provided or to be provided is inclusive of service tax payable, the value of such taxable service shall be such amount as, with the addition of tax payable, is equal to the gross amount charged"

once again thanks.

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