Dear All,
we are service receiver, we are paying 75% service tax payment.
now my Question is can we get cenvat credit on 25%.?
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Cenvat credit on reverse charge mechanism
Replies (17)
Please clearely mentioned facts in brief, so that we can reply properly.
I dont think you can get CENVAT CREDIT for 25% since the service provider will avail that.
Yes u can take credit of 25%,as that 25% will also be recovered from you by service provider. Cenvat of 75% is available after payment & for 25% on invoice basis. Hope so ur doubt wil b clear.
Dear Nitin,
Cenvat Credit of Service Tax under RCM is eligible ;
Provider part of Service Tax is on the strength of Service Invoice/Service Bill.
Receiver part of Service tax is on the strength of GAR-7 Payment Challan.
To,
CA sandeep soni,
Our vendor is suppling manpower to our company. Manpower supplier is Individual & service receiver is
Company.
as per reverse charge machanism
service provide has to pay service tax 25%
service receiver has to pay service tax 75% .
so service receiver can get cenvat credit? if yes what is %.
Dear Nitin.. Ur query is already resloved by Mr. Sathya.. which states that 100% of Cenvat can be availed by the service reciever company, despite 75% paid under reverse charge & 25% paid via Sr. provider.
Thank sir for giving reply
As per entry No.8 in notification 30/2012 ST, dated 20-06-2012, the service tax to the extent of 75% is payable by recipient of service & balance 25% is provider of service.
Your liability to pay ST is to the extent of 75%, so accordingly you will get Cenvat credit of 75% only irrespective whether SP charged ST or not or pay 25% ST or not (he may be SSP covered under ST exemption limit).
You will get cenvat credit to the extent of 75% only.
1)25% of cenvat credit can be taken as per invoice
2)75% of cenvat can be taken at the time of payment of service tax using GAR7
means total 100% can be taken provided it is eligible input.
rcm is only mode of collection of service tax you can get cenvat as before with no change but it deferes say 25% and 75%
Hi,
The percentage of service tax covered under RCM I.e. payment directly to govt. the cenvat credit in such case will depend upon the % of payment made to vendor and Service tax authority.
However, if not paid to vendor within 6 months, the service tax amount had to be paid with interest and no credit will be available on this amt unless balance is paid to vendor.
The rest % will be covered under accrual method and credit can be utilised till 90 days if payment not made to vendor.
You can get 100% credit but one more thing I will add that the 25% credit will allowed only when u make payment for bill of manpower in 90 days. U must Provo to dept that u have made d pmt in 90 days at d time of departmental audit
yes, you can get the Cenvat credit for the 75% if you paid by challan,
you may take the credit of all the service tax which is charged from you or paid by you under rcm.
Dear Sir
Our company is registered under Clearing & Forwarding Agency as we sale Products on behalf of Manufacturer & earn Commission. For this Sale distribution we use Service of a local transporter who is individual and distributes only our products on basis of our Bills. (no consignment note issued) And on month end he produces bill for that transport. my question is
1. Whether we are liable to pay service tax under RCM.
2. Whether we can take abatement @ 75% if we are liable to pay under RCM or we have to pay @ 100%.
3. Whether we can take Credit of the the Service Tax payment paid as above (25% or 100%).
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