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Claiming of cenvat credit in case of reverse charge by nbfc

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This query is : Resolved

Sairam (Querist)

18 April 2014 Hi All, I came across a circumstance where an NBFC(being service receiver) settled an advocate fee with service tax portion of Rs.6000, though the advocate did not charge service tax in their bill. NBFC paid the bill and service tax separately to the govt under rev charge mec. Now my query is whether the NBFC can claim cenvat for entire 6000 or only half of it(6000/2=3000). Kindly reply with any notification or circular if any

Annu Agarwal

Annu Agarwal (Expert)

20 April 2014 Lets study your case:
1.Why the NBFC paid service tax under reverse charge:As per entry no.4 of Notification no.30/2012 in respect of service provided by an individual advocate,100% service tax shall be paid by service receiver.
2.Why did the NBFC utilized only 50% of the cenvat credit,whereasis paid 100% service tax:As per Rule 6(3B) read with Rule 6(3D) of Cenvat Credit Rules the NBFC are allowed to take 50% cenvat credit.

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