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Reverse charge mechanism

This query is : Resolved 
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(Querist)
18 August 2012 Sir,
please let me know why we cannot pay service tax in respect of services under reverse charge mechanisam like Manpower Consultant etc...out of cenvat balance available.Why we need to pay by Cash. Is there any notification ???
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CA Navin Jain

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CA Navin Jain (Expert)
18 August 2012 YOU CAN NOT UTILISE CENVAT CREDIT BALANCE FOR THE PURPOSE OF SERVICE TAX LIBILITY UNDER REVERSE CHARGE.
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Sandeep Rathi

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Sandeep Rathi (Querist)
18 August 2012 Please give supportings to your view ???
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CA Navin Jain

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CA Navin Jain (Expert)
18 August 2012 under reverse charge, st liability is not real libility of service receiver, ST liability is transfer from st provider to st receiver.
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Guest

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Guest (Expert)
18 August 2012 Service Receiver is liable to pay taxes under reverse charge. Cenvat cannot be utilised against this payment so it shall be an explicit cash outflow. Further once the tax is paid under reverse charge the same can be utilised as Cenvat subject to Cenvat credit rules.
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