Input credit taken but st not deposited

Dear Tushar

You have not mentioned whether the Service provider was registered with the Service Tax Department when the service was provided and invoiced.

It would be prudent for you to reverse the Input Credit taken to avoid interest and litigation thereafter. If you are willing to fight it out in a Court of Law, then you can go ahead and utilise the Input Credit as there is nothing in the service tax law which compels the service receiver to ensure that the payment of the service tax collected on a valid invoice by the service provider is deposited into the Government Treasury.