Cenvat credit on bill of works contractor

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DIPAL SHAH

PROPRIETOR

61 Points Joined December 2009

ASSESSSEE HAS RECEIVED WORKS CONTRACT BILL ON WHICH SERVICE TAX WAS NOT LEVIED. ASSESSEE MADE THE PAYMENT TO SUCH PARTY WHO HAS NOT APPLIED SERVICE TAX ON SUHC SERVICES. AFTER TWO YEARS, THE CONTRACTOR RECEIVED A SERIVCE TAX NOTICE ASKING FOR PAYMENT OF SERVICE TAX. CONTRACTOR MADE THE PAYMENT OF SERVICE TAX AND NOW THE SAME HAS CHARGED TO ASSESSEE.

QUESTION IS CAN ASSESSEE AFTER MAKING PAYMENT OF SUCH SERVICE TAX TO CONTRACTOR, CAN CLAIM CREDIT OF SUCH SERVICE TAX PAID IN HIS RETURN OF SERVICE TAX ?

Replies (4)

CA Prabhat Gupta

Manager (Indirect Taxes)

821 Points Joined January 2011

To my knowledge, no period has been specified for availing credit of service tax. If the works contractor issues a fresh invoice in lieu of the old one or issues a debit note refering to the old bill, and such bill or debit note contains all informations such as STR no., address of Service Provider, type of service, etc. there should be no objection in taking credit of such service tax paid.

CA Prabhat Gupta

Manager (Indirect Taxes)

821 Points Joined January 2011

You can also refer to rule 9 of CENVAT credit rules, 2004 and point number 4 of Notification No.10/2007-CE (NT) dated01.03.2007. the links are given below:

https://www.cbec.gov.in/excise/new-cenvat-rules.htm

https://www.cbec.gov.in/excise/cx-act/notfns-2k7/cent10-2k7.pdf

Hope this clarifies your doubt.

Madhukar N Hiregange

Chartered Accountant

39039 Points Joined September 2008

There is no time limit for availment of ELIGIBLE credit used for provding taxable services provided that the service reciver is not claiming abatement / deduction where input service credits are barred [ ex Not. 1/2006]

Further in this FA 2011 there is a condition that where the ST has been recovered under the extneded period of limitation of fraud collusion/. supression etc, then the receiver is not eligible. Prior to this year there was no such condition.

DIPAL SHAH

PROPRIETOR

61 Points Joined December 2009

BUT THE QUESTION IS THAT SERVICE TAX WAS NOT LEVIED BY WORKS CONTRACTOR AT THE TIME OF ISSUE OF BILL BUT AFTER THE NOTICE FROM SERVICE TAX DEPT. THEY ARE ASKING FOR SERVICE TAX FROM THE ASSESSEE. CAN SUCH SERVICE TAX PAID BY ASSESSEE TO WORKS CONTRACTOR BE CLAIMED AS CENVAT CREDIT ? PLEASE KEEP IT IN MIND THAT SERVICE WAS PROVIDE 5 YEARS AGO & AT THAT TIME SERVICE TAX WAS NOT CHARGED FROM ASSESSEE.