Availment of Cenvat Credit on Input Service Bills

Yes u can definitely take cenvat credit For Rs.5.15 after paying Rs.50+ST.

In case of Input services Cenvat credit SHALL availed as soon as payment is made for that and even  when part payment is made Cenvat credit availed , accordingly as per rule 4(1) of Cenvat Credit Rules,2004 and it will not make any difference even if Input servicer are procured from Associated enterprise. Surely, this is true

yes u can avail

yes,service tax can be claimed in this case.

Rule 4(7) states that credit can be availed when the payment is made. The reasonable construction would be that to the extent ( proportionate) payment is made it would be available. Otherwise it would lead to a number of unintended hardships and the very purpose of the scheme to avaoid cascading effect would nto be served.

This procedure is being followed now for 5 years and there is no dispute from the department in this regard.

Therefore I am of the firm view that the credit of input services is available on payment proportinately.

Principle of interpretation by convenience is not applicable where the wording and intention of law is very clear.

Rule 4(7)

So unless u pay tax and value indicated on invoice, no credit is available.

The CENVAT credit in respect of input service shall be allowed, on or after the day whichpayment is made of the value of input service and the service tax paid or payable as is indicated in invoice, bill or, as the case may be, challan referred to in rule 9.

Whether availment of Cenvat on service tax is manadatory.

Or is the cenvat on service tax book as expenses in P/L

Plz answer this question

The issue seems to be  litigation prone . It ,therefore, is advisable to take the credit after payment is effected in full.If the service provider  belongs to group company, for payment of tax , date of bills is the criteria and not date of payment. This makes no difference as far as your question on cenvat credit is concerned.

In my Organisation also, the view was same that  "No input Credit can be availed unless we make full payment to the Vendor of the amount mentioned on the Invoices" . I had great threadbare with my seniors. Finally , It has been accepted that the proportionate Input Credit is allowed on part payment to Vendor. The view of Proportionate Credit is also acceptable to Department. Still if somebody feels that Proportionate Input Credit is not as per the provision of the Act, I will suggest few ways: 1. while making the part payment clearly mention to your Vendor that part payament include full amount of Service Tax & Cess.  or 2. Tell your vendor to raise bills in parts, i.e., One bill for current payment & other(s) for the amount to br paid later on etc.