Input credit reversal

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C.A.Anshu

C.A.Anshu (Querist)
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21 February 2012 Dear Sir,

I wanted to know the exact provisions regarding regarding the following points:

1) Input Service tax credit has been taken but Payment not made within 90 days.
Reversal should be done in which period?

2) The payment has been made after 90 days then can the credit be taken later on?

3) if the invoice date is 4.08.2011 and we have received the bill on 1.10.2011 and payment made on 25.11.2011. Then is the credit to be reversed?

4) In case if we have not reversed the credit, though the payment is made after 90 days , then what are the penal provisions?

Dayal

Dayal (Expert)
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21 February 2012 Replied as under

1. Input credit taken will need to be reversed, and even though not utilised, interest would be payable from the date of availing the credit.

2.There is no time bound limit for availing the credit, however as an advise it should be availed within one year

3. you have not clarified when the credit was availed, whether on 04/08/11 or 01/10/2011. Normally credit would be availed only when bill has been received. If you have aviled 0n 04/08/11 then interest will be payable barring 3 months from 25/11/2011 i.e interest would be payable from 04/08/11 till 22/09/11

4.Interest is payable @ 18% for wrong availment from the date of credit till the date of payment. If intervened by department equivalent penalty may be levied

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