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Regarding service tax credit

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(Querist)
03 February 2016 wthether cenvat credit available in payment of service tax in reverse charge , (chalan paid by service receipt)
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Suresh Ramaswamy

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Suresh Ramaswamy (Expert)
03 February 2016 Under Reverse Charge Mechanism the duty is payable by challan. CENVAT credit cannot be used to pay Reverse Charge Liability. Rule 2(l) of the CENVAT Credit Rules 2004 specifically denies payments of duty on Rent-a-cab & Goods Transport Agency as Input services. Similarly CE paid on High Speed Diesel & Petrol is not a CENVAT product. Therefore barring the specifically excluded services, service tax paid under Reverse Charge Mechanism are eligible for Input Credit - the Input Document is the GAR - 7 Challan and therefore the Input Credit can be availed only on the day after the Reverse Charge is paid.
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