Input credit on payment of service tax on reverse charge

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GUDLA SAI PRASAD

GUDLA SAI PRASAD (Querist)

07 June 2013 can a company claim input credit for payment of service tax on reverse charge mechanism.

Ganeshbabu K

Ganeshbabu K (Expert)

07 June 2013 1)The small service provider exemption of
10 lakhs not available when tax is
payable under reverse charge.

2)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.

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

4)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.

5)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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