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Input credit taken but st not deposited

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Tushar

Student

34 Points Posted on 30 January 2013

Dear All,

My company have made payment of service tax to service provider and taken the input credit. but its been 9 months the service provider have not made the payment to service tax department. i have documentry evidence that I have received the service and made the payment.

so will there any problem for me as the service provider has not the made the payment to department?

Thanking You

Tushar

Replies (1)

Mr Subrata Dasgupta

Finance Professional

170 Points Posted on 31 January 2013

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.