RCM and cenvat on it.
This query is : Resolved
27 June 2016
Dear seniors,
Can we claim cenvat on payment of service tax paid under reverse charge for the consultancy services from outside india.
Similarly can we also claim cenvat for advocate services, manpower,hire a cab/taxi etc.
Thank you
Regards, Nadeem
28 June 2016
Yes, credit is allowed so long as the services specified by you qualify as input service under 2(l) of the CCR 2004. Credit on Rent a cab services are not allowed unless motor vehicle is capital goods for the assessee.
28 June 2016
Thanks to help,
Can you also please send me the reference circular, if any.
29 June 2016
Please refer to Rule 2(l) of the Cenvat Credit Rules 2004.
10 July 2016
Hello,
I am unable to get precise information undet rule 2(1),Kindly suggest how to read or pls share the case study in support of your answere or elaborate more
Thanks
10 July 2016
Please note i want clarify on cenvat credit available on import of service mainly..
20 July 2025
1. CENVAT Credit on RCM paid on Imported Services
Under CENVAT Credit Rules, 2004, credit of service tax paid under reverse charge on services imported from outside India is allowed.
Rule 2(l) defines "input service" and includes services received from outside India on which service tax is payable under reverse charge.
Therefore, if your company pays service tax under RCM on imported services (like consultancy from abroad), you can avail CENVAT credit on such service tax paid.
2. CENVAT Credit on Other Services under RCM
Services such as advocate/legal services, manpower supply, hire of cabs/taxis, if liable for reverse charge, the service tax paid under RCM is eligible for CENVAT credit subject to:
The services are used in or in relation to the manufacture of goods or provision of output services.
You are registered under the CENVAT credit rules and comply with documentation requirements.
The credit can be used for payment of excise duty or service tax.
3. Important Notes
You must have a proper invoice showing service tax paid under reverse charge.
The service should be used for business purposes.
Credit cannot be availed on services used for exempted goods or services.
Under CENVAT Credit Rules, 2004, credit of service tax paid under reverse charge on services imported from outside India is allowed.
Rule 2(l) defines "input service" and includes services received from outside India on which service tax is payable under reverse charge.
Therefore, if your company pays service tax under RCM on imported services (like consultancy from abroad), you can avail CENVAT credit on such service tax paid.
2. CENVAT Credit on Other Services under RCM
Services such as advocate/legal services, manpower supply, hire of cabs/taxis, if liable for reverse charge, the service tax paid under RCM is eligible for CENVAT credit subject to:
The services are used in or in relation to the manufacture of goods or provision of output services.
You are registered under the CENVAT credit rules and comply with documentation requirements.
The credit can be used for payment of excise duty or service tax.
3. Important Notes
You must have a proper invoice showing service tax paid under reverse charge.
The service should be used for business purposes.
Credit cannot be availed on services used for exempted goods or services.
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