True or false

Is following true?

Service Tax Input Credit against the purchase bills can be availed even if payment is not made to the Service Provider. However, if payment is not made to the Service Provider within 3 months, the Service Tax Credit availed/utilised has to be reversed.

Thanks

Shivani

Replies (2)

Yes, According to Rule 4(7) of Cenvat Credit Rules, 2004, the Cenvat Credit in respect of input service can be availed immediately upon RECEIPT of the Invoice/Bill irrespective of payment thereof to the service provider. However, if the payment towards value of input service and service tax thereon is not made within three months of the DATE OF INVOICE/BILL, then the Cenvat Credit availed earlier has to be paid. This Credit is again available upon actual payment of Invoice and tax.

Yes Correct!

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