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TMI BlogST RCM and CENVAT CREDITX X X X Extracts X X X X X X X X Extracts X X X X ..... A company has following liability as on 31.03.2016: Service Tax Payable (Other than RCM) = ₹ 5,00,000/- Service Tax payable on RCM = ₹ 2,00,000/-. Both these liabilities not paid till date. Now the Company wants to pay but the Company wants to pay first RCM liability and take credit of that amount to pay ST Payable of ₹ 5,00,000/- and Rest pay in cash/bank. Credit of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... RCM is available only after payment but that credit falls in next FY i.e. FY 2016-17. Now whether the Company can do so? In my view, the Company can't do so because liability falling in FY 2015-16 and credit available in FY 2016-17. Both these payments have to be made by cash/bank including interests amount as appliacable. Please suggest best way out. - Reply By Ganeshan Kalya ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ni - The Reply = In my view, you can take the credit. The input service should have been used in relation to the service provided. The input service should have nexus with the output service provided. - Reply By Ganeshan Kalyani - The Reply = The challan is the document based on which credit can be taken. It does not determine the eligibility of the credit. Thanks. - Reply By Bijay Shrestha - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Reply = But Interest on full ST payable (Other than RCM ) has to be paid right?? - Reply By Rajagopalan Ranganathan - The Reply = Sir, In respect service tax payable on RCM the date on which the service tax is paid into government Account is the relevant date to compute one year time limit. Therefore though the service tax is payable during 2015-16 it is paid by you in 2016-17 along wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h the due interest. Therefore you can take credit of service tax paid with one year from the date of deposit of the service tax into government Account. Such credit can be utilised for payment of service tax subsequently and there is no bar under Finance Act, 1994 and/or CENVAT Credit Rules, 2004. - Reply By Ganeshan Kalyani - The Reply = Interest on delayed payment shall apply on both the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liabilities I.e. RCM and other than RCM. - Reply By Bijay Shrestha - The Reply = Correct. What I mean is in case of RCM Liability - Interest on full ₹ 2 lakhs Also in case of Other ST liability - Interest on full ₹ 5 Lakhs is payable. It is not on ₹ 3 Lakhs (i.e. ₹ 5-2=3 Lakhs) Right?? - Reply By Ganeshan Kalyani - The Reply = Yes the interest is applicable on both ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the delayed payment. Also please refer the reply submitted by Sri Rajagopalan Sir. - Reply By Bijay Shrestha - The Reply = Agree sir. But Interest on what amount?? - Reply By Ganeshan Kalyani - The Reply = Interest on outstanding amount. - Reply By Bijay Shrestha - The Reply = sir, interest on both ₹ 5,00,000/- and 2,00,000/- OR On net payable of ₹ 3,00,000/- ??? - ST RC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... M and CENVAT CREDIT - Query Started By: - Bijay Shrestha Dated:- 16-10-2016 Service Tax - Got 10 Replies - Service Tax - Discussion Forum - Knowledge Sharing, reply post by an expert, personal opinion Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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