Hi Experts,
As per provision of input service , the credit needs to be reversed if value of input service and service tax payable not paid within 3 months of the date of invoice/bill/challan.
please explain the provision and consequences. Also, how we can verify if the service provider from whom the input service is taken has paid the tax due withing 3 months.
your help is appreciated.
As per this provision( Rule 4(7)), where service reciever fails to pay value of input service & service tax indicated in the invoice to service provider within a period of three months, then he is required to reverse the credit of service tax taken, if any, on these input services. But when SR pays the vaue of input service & Service tax(even after 3 months) then he may again takes the credit of service tax.
In this case SR is not required to verify from SP anything about payment of service tax.
Bharat Shah & Associates
Mumbai
CA Inter
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Sanath Sheshagiri & Co.
Bengaluru
CA Inter
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CCI
Pro
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