Dear All
Kindly provide your opinion on the following observations :-
a) As per rule 7 of Point of taxation rules, 2011 , Service tax under reverse charge is required to be paid at the time of payment of Value of service to the party concerned.
one exception is there, if payment is not made within a period of 3 months from the date of invoice, POT will be the date immediately following the period of 3 months.
My Queries in the above provision :-
Trade payable parties which fall under Reverse charge mechanism have balances outstanding for more than 3 months and against such balances company has taken service tax credit, which in my opinion should be reversed and will be allowed after 3 months from the date of invoice as and when the payment to party made by company.
b) Rule 4(7) of CCR,2004,
First proviso says in the case the payment of value of input service and the service tax paid or payable as indicated in the invoice, bill or, as the case may be, challan referred to in rule 9, is not made within three months of the date of invoice ,then manufacturer shall pay the amount of cenvat credit availed on such input service and the same will be allowed as and when the payment will be made by manufacturer.
My Queries in the above provision :-
Trade payable parties have balances outstanding for more than 3 months and against such balances company has taken service tax credit(other than reverse charge mechanism), which in my opinion should be reversed and will be allowed after 3 months from the date of invoice as and when the payment to party made by company.
Regards
Pradeep Kumar
CAclubindia
