Service tax input of reverse charges machanism

This query is : Resolved

shankarchandak (Querist)
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03 December 2012 We are in real estate business receiving flat booking money plus Service Tax @ 3.09 % on flat booking amount.

Can we avail the service tax input on reverse charges i.e of Security charges, Work Contract, Labour charges etc ?

1. If we have more that one site of construction, can be adjust the service tax liabilities with reverse charges mechanism payment of any site.

2 should we adjust service tax input with s .Tax liabilities payment of particular site or can set off with any other site also ?

Please give your valuable suggestion.

CA bhargava

CA bhargava (Expert)
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03 December 2012 the service tax which u have to pay under the reverse charge mechanism., should be paid by u in cash only., u cannot avail the cenvat credit if available to setoff that.,

but ., on payment of the above tax., u can avail the cenvat credit for the payment of Out put service tax.

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shankarchandak

shankarchandak (Querist)
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03 December 2012 Please reply to my Point no. 1 & 2.

Further, we are paying the service tax under reverse charges machanism and there after adjusting the service tax payable with Reverse service charges.

Pl. reply

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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04 December 2012 1. You can avail CENVAT credit of the service tax paid by you under reverse charge. However, if you are recovering the same from the service provider, then you CANNOT avail CENVAT credit.

2. If you wish to utilise CENVAT credit of one site with other site, then you have to register as Input Service Distributor.

Otherwise you cannot utilise CENVAT credit of one site against service tax liability of other site.

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