Service tax - input taken from rcm paid

836 views 4 replies

M.Shanmugasundaram

Accounts

234 Points Posted on 27 October 2015

Dear Sir,

Our company is paid Service Tax (Aug-15) Amount Rs.14,000/- by Reverse Charge Mechanisam (As Service Receiver = Legal Service Rs.4,000 + Security Service Rs.10,000)

1) Sep-15th Liability is Service Bill Tax Amt Rs.20,000 + RCM (Legal Service Payment) Rs.4,000 + RCM (Security Service Payment) Rs.2,000 = Total Liability Rs.26,000

2) Can we take cenvat input from Aug-15 RCM Paid for Sep-15th Service Tax Liability ..?

(26,000 Less: 14,000 Less: Service Tax Input (Mobile Bills Payment) Rs.1,000 = Net to be paid Rs. 11,000)

3) We are already paid Service Tax RCM Amount Rs.40,000/- for 2014-15th Labour Contract Payment on 20.10.2015. Can we adjust this amount to the above Liability....?

Please clarify me..

Thanking You,

Regards,

M.Shanmugasundaram

Replies (4)

Vipul Mittal

Consultant - Indirect Tax

97 Points Posted on 27 October 2015

Service tax liability under reverse charge mechanism has to be discharged in Cash only. CENVAT credit can not be utilized for such payments.

However you can avail the CENVAT credit of such service tax paid against your excise duty/service tax liability on product manufactured/services rendered by you.

Regards

Vipul Mittal

CA Prashant Hegde

Chartered Accountant

375 Points Posted on 27 October 2015

Yes, you can take Service tax under RCM paid earlier as input against normal service tax ourput, not against RCM output. Service tax on RCM to be discharge by cash only. You can take last year Service tax under RCM also as input in this period.

Manoj Gupta

Non

21 Points Posted on 28 October 2015

Hi.

I have a sound & lights rental company in Delhi, last year we are regd. under other taxable services other than the 119 listed. We are invoicing in advance or before receiving the payment like in qtr. apr-june billing of amount rs. 40,04,984+4,95,016=45,00,000/- (amount including service tax @ 12.36%) but the payment received till 30th June rs.24,91,990+3,08,010=28,00,000/- and we deposit service tax on receipt basis Rs.3,08,010/- plus interest it is right or not please suggest.

thanks & regards...

manoj gupta