Service tax credit

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

02 December 2011 IN F.Y. 2011-12 IF THE RECEIVER OF THE SERVICE TAKES THE CREDIT OF SERVICE TAX AND NOT MADE THE PAYMENT TO THE PARTY WITH IN 90 DAYS. NOW WHETHER THE RECEIVER OF THE SERVICE WILL BE ELIGIBLE TO TAKE THE CREDIT OF THE SERVICE TAX OR NOT

PUNEET GOYAL

PUNEET GOYAL (Expert)
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02 December 2011 As per second proviso to Rule 4 (7) of CENVAT Credit Rules, 2004
Provided further that in case the payment of the value of input service and the service tax paid or payable as indicated in the invoice, bill or, as the case may be, challan referred to in rule 9, is not made within three months of the date of the invoice, bill or, as the case may be, challan, the manufacturer or the service provider who has taken credit on such input service, shall pay an amount equal to the CENVAT credit availed on such input service and in case the said payment is made, the manufacturer or output service provider, as the case may be, shall be entitled to take the credit of the amount equivalent to the CENVAT credit paid earlier subject to the other provisions of these rules:
Thus it is clear from the above provision that if payment is not made within 3 months from the date of invoice etc then amount equal to the credit taken on input services shall be paid by the assesse. Assessee can again take CENVAT credit when he will made the payment in respect of such input services.

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