Cenvat credit under rcm

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Jaimin (Querist)
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03 December 2013 Can an assessee set off CENVAT credit of service tax paid against its liability to pay service tax under Reverse Charge Mechanism? Please advise urgently.

CA Pratik Shahnand

CA Pratik Shahnand (Expert)
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03 December 2013 Dear Jaimin,

Service Tax under RCM has to be paid by cash and the credit of same has to be taken against the liability next month.

Regards,
CA Pratik Shahnand
pratik.shahnand@gmail.com

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Ganeshbabu K

Ganeshbabu K (Expert)
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04 December 2013 1)Cenvat credit cannot be used to pay tax by service receiver. Service tax as to be paid by cash only i.e. GAR-7 challan.

2)Once paid, Cenvat credit can be taken if otherwise it is his eligible ‘input service’.

3)Tax should be paid under service tax registration number of service receiver and included in his return as he is liable to pay service tax.

4)Service tax is payable by service receiver when actual payment is made to service provider and not on receipt of Invoice from service provider. However, if payment is not made to service provider within 6 months, service tax is anyway payable. Interest is also payable.

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