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Cenvat credit rules 4(7)

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Querist : Anonymous

Querist : Anonymous (Querist)

25 April 2016 i want to know whereas we can take cenvat credit in case of 100% rcm and we are service receiver and tax amount paid to service tax department 6 month later from the date of invoice.
for example: A subcontractor raised a invoice rs 2000000+280000=2280000 in month of october 2015. i have paid to contractor 1980000 in month of november but service tax amount paid to department in month of march 2016 so in this case can i take cenvat in the month of october yes or no.
thanks

Suresh Ramaswamy

Suresh Ramaswamy (Expert)

25 April 2016 The amended Rule 4(7) provides that the payment of service tax and the invoice shall be made within 3 months of the date of invoice. Notification No: 13 / 2014 provides that if the service tax under RCM is not paid within 3 months of the date of invoice, the POT shall the be the day immediately following the expiry of 3 months. Therefore the eligible date for availing service tax in your case is January 2016. Since the service tax under RCM was not paid within 3 months or assumed POT, you are liable for interest on delayed payment. However you can avail of the Input Credit after the payment of tax i.e. in March 2016. In no case can you avail of the Input Credit in October 2015.

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