Payment of creditor after 90 days

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

04 January 2015 if i have received a bill for service received and payment to creditor after 90 days on raising of invoice date then whether service tax should be reversed.

P V Ram

P V Ram (Expert)
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04 January 2015 if pymnt. is not made within 90 days service tax is to be reversed. However, if payment is made within 6 months, the credit can be availed upon making payment. In case payment is made after 6 months then credt cannot be availed eventhough payment is made.

for example for an invoice dt: 01.01.2015:
From 01.01.15 to 31.03.15 Credit can be availed evenrhough payment is not made.
From 01.04.15 to 30.06.15 credit can be availed only if payment is made.
From 01.07.15 no credit can be availed even if you make payment.

Thanks!

CA Kumar Mukesh

CA Kumar Mukesh (Expert)
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04 January 2015 You don't need to worry the person how avail the service tax input under cenvat credit rules 2004, require to compensate the service provider within 6 month from the date of invoice, under rule 4(1) of said rules we.f.e 1st Septemebr, 2014

Earlier the limit was 90 days is no longer applicable.

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