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Can Cenvat Credit be availed on Import of Services?


Sunil Nayak (Chartered Accountants)     08 June 2008

Sunil Nayak
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Mr. X has paid service tax on import of services from UK as a receipient of service as per section 66A of the Service Tax Law. Can he avail CENVAT credit on this?

Rule 3(1) provides that CENVAT credit is available to the service tax paid under section 66 of the Act. Further, Rule 5 of Import of Service Rules says that, the service received from outside India shall not be treated as output service for the purpose of taking Cenvat Credit.

Please clarify whether Mr. X can take CENVAT credit of tax paid on import of service? If Cenvat credit is not available, can he claim refund of tax paid as a recipeint fo service?

Regards,

Sunil Nayak.

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priyanka (manager)     09 June 2008

priyanka
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If the Import service falls under specified services u can claim refund otherwise it will be treated as a port of expense.

CA Rahul Gupta (Ca )     09 June 2008

CA Rahul Gupta
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Yes he can take the credit refer rule 9 of cenvat credit rules 2004

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Sunil Nayak (Chartered Accountants)     09 June 2008

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Hi Priyanka would you please tell me the list of specified services? Regards Sunil Nayak

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Sunil Nayak (Chartered Accountants)     09 June 2008

Sunil Nayak
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Hi Rahul

Woul you please elaborate more on this about the taking the Cenvat credit?

Regards

Sunil Nayak

 

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MONISH BHALLA (DIRECTOR)     10 June 2008

MONISH BHALLA
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no you cannot take cenvat credit  under reverse charge method. nor refund can be taken as the same is only incase of specified services in relation to exports

cashekar (Chartered Accountant)     10 June 2008

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With regard to your query:

Now the department has become active in this regard. The departments contension is that under the cenvat credit rules only credit is allowed for Section 66 payments and not applicable to 66A payments. But technically you can take a stand the the rate of service tax is not mentioned in sec 66A and states that all the provision of Chapter V of Finance Act becomes applicable. hence the levy is under 66 of the service tax itself. Even there is a circular to the effect that the taxes paid under the import of service rules can be setoff against the payment of other output service tax payable. 

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Tushar Bhootra (CA)     23 October 2009

Tushar Bhootra
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Hey I also Wanna Know about the Provision in relation to Availment of Canvat credit for the Services received from out of India..I also agree with Mr. Taxolegal..but still confuse..can clarify with reasons...

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A. Kiran Kumar (Manager - Indirext Taxation)     24 October 2009

A. Kiran Kumar
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Board has given a clear clarification on this issue allowing cenvat credit of service tax paid on import of services in reverse charge mechanism. Please see attached file.


Attached File : 38 cenvat credit 66a.pdf downloaded: 1881 times
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Jimmy (CA )     15 April 2011

Jimmy
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when can we claim this input on payment of Service or payment of corresponding Service Tax??

 


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