Clarification regarding availment of credit on input services - reg

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..... of Central Excise and Service Tax (ALL), The Director General of Service Tax The Director General of Audit The Director General of Central Excise Intelligence, The Commissioners of Service Tax (ALL) Madam/Sir, Subject: Clarification regarding availment of credit on input services - reg. **************** Representations have been received by Board regarding denial of CENVAT credit .....

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..... on input service is available only after the actual payment of the value of input service has been made in money terms. 3. As per sub-rule (7) of Rule 4 of the CENVAT Credit Rules, 2004 , "Credit in respect of input service shall be allowed, on or after the day on which payment is made of the value of input service and the service tax paid or payable as is indicated in invoice, bill or as .....

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..... aised objections to the taking of credit as it does not meet the requirement of the said sub-rule (7). 4. Thus the following issues relating to availment of CENVAT credit need clarification,- Whether CENVAT credit can be claimed (a) when payments are made through debit/credit notes and debit/credit entries in books of account or by any other mode as mentioned in section 67 Explanation (c) .....

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..... t place restriction on payment through debit in the books of accounts. Therefore, if the service charges as well as the service tax have been paid in any prescribed manner which is entitled to be called 'gross amount charged' then credit should be allowed under said rule 4(7) . Thus, in the case of "Associate Enterprises", credit of service tax can be availed of when the payment has been made to .....

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..... paid as service tax. However, in case of subsequent refund or extra payment of service tax, the credit would also be altered accordingly. 6. The contents of this circular may be suitably brought to the notice of the field formations. In case any difficulty is faced in implementing these instructions, the same may be brought to the notice of the undersigned. Yours faithfully (Himanshu Gup .....

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