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Service tax on repair an maintenance

Vishal GUpta (Student CA IPC / IPCC) (44 Points)

20 March 2015

Sir,

I am at Internak Audit and i am Confronting a Problem while Ledger Scrutiny.Our Client HAs paid Service tax on Repair and maintenance but they have amde the entry for the same as followings

Dr. Repair and Maintenance

Dr. Service Tax Receivable

Cr Party

So My question is that the above Entry is correct? If they can receive such service tax paid on Repair and Maintenance becaus ein my opinion the entry should be

Dr. Repair ad Maintenance

Cr. Party

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10 Replies

CMA Poornima Madhava (CMA) (13097 Points)
Replied 20 March 2015

If your client is allowed to claim input service credit then a separate account has to be maintained for the same. Hence the entry. If no input service is to be claimed, then the entire amount can be debited to R&M a/c

Saurabh Maheshwari (B.com,ACA) (5923 Points)
Replied 20 March 2015

Ya agreed with Poornima...ST receivablle is Cenvat credit receivable.So, check whether the account has been grouped under current assets(short term loans&advances)

shweta nair (ipcc) (28 Points)
Replied 20 March 2015

Is this reverse charge mechanism?

Atul Taneja (Article Trainee) (23 Points)
Replied 21 March 2015

If your client is eligible to take input credit of Service tax paid, maintain a separate ledger for the same & if client ia not eligible then expense out entire service tax paid. For checking eligibility of your client in regards to CENVAT credit receivable, check excise registration for the same. For checking eligibility of client, check excise registration certificate for the same For checking eligibility of clien

Dinesh Chauhan (Article Assistant) (23 Points)
Replied 21 March 2015

Reverse charge mechanism is not covered the repairs and maintenance service..

CA. Mohd. Adnan Ansari (Business) (89 Points)
Replied 22 March 2015

If ur client is registered under service tax then even u can claim cenvat credit of service tax and repair n maintenance paid to vendor. Pls mention d nature of urs client business, n repair n maintenance. Nature of transaction n business can define that can we take cenvat credit or not