Reverse /Partial Reverse Charge Mechanism, Service Tax

[Srivatsan Krishnamachari]

Dear Learned Ladies & Gentlemen, Kindly clarify the following query : 

 In case of a few services like Legal consultancy ,Man-Power Supply & Security Agencies  the onus  is on the service recepient for dishcharging the liability of  tax; 100% in case of the former and 75% in case of the latter(Man-Power Supply & Security Agencies) The payment has to be made wihin six months from the date of the Invoice and until the liability of service tax is discharged by remiittance, cenvat credit cannot beavailed. Suppose if a Legal Consultancy Firm raises a Bill on a body -corporate say on 1st january 2013 for Rs.1,00,000/- and the service recepient body-corporate remit the service tax @ 12.36% -Rs.12360/- to the Department wih in the stipulated six months period but does not clear the Fees for Legal Consultancy -Rs.1,00,000; Under this circumstance can the service recepient claim the cenvat  credit for the service tax discharged as aforesaid though it has not paid the "Fees"

Thanks & With Regards,

K.Srivatsan

Posts / Replies

[Pradeep Khatri]

The taxable value and tax both are required to be paid.   There was a circular/clarification by the Department in this regard.

[ANAND SHEMBEKAR]

For availing the cenvat credit on input services , both the value of bill and service tax thereon must be paid . Then only you can taken the cenvat credit.

Thanks

 

A M SHEMBEKAR

CELL 9421187122

[JAMES PG]

Please refer to first proviso to sub rule 7 of Rule 4 of CCR, which clearly lays down that Cenvat credit in respect of service tax paid on Reverse charge shall be allowed on or after the day on which payment is made of teh value of input service and the service tax paid or payable