5/17/2014 CENVAT- IMPORT SERVICES

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CENVAT- IMPORT SERVICES (Service Tax)

This query is : Resolved

Facts:

ABC Pvt. ltd.(Manufacturer) exports its products,

It pays Commission to Non resident Agents.
It also pays service Tax fo Import of Services.It is not liable for service tax under
any other catagory.
Pbmangarolia
( Author )
Example: Service Tax Payable on Commission Rs. 100, Input Excise Credit Rs. 70,
02 January 2008
Input Service Tax Credit Rs.10, Excise duty Payable Rs. 200

Questions:
- Can the company take credit of Input Excise as weel as Service tax i.e. Rs. 80
and pay Rs. 20? (I think not Possible)

- Should the Company Pay Rs. 100 for Service Tax?

- If it pays Rs. 100 as Service Tax and take it as Input Credit for Payment of
Excise i.e.Rs.200- Rs.100- Rs.70- rs.10 = Rs.20, is it ok?

-Is it necessary that to consider this reverse Charge as Input Credit, You must
be service provider?

Considering the above example pls. confirm The actual Libility under service Tax
i.e. Rs. 100, Rs.20 and for excise Rs.120, Rs. 20?

Thanks

Under the reverse charge mechanism you cannot adjust cenvat credit, of Rs. 80/-
( Rs. 70+Rs. 10/-)

This has to be paid vide GAR7 first under Import of Services Rule 5 and later on
you can take the credit for payment of your excise duty or Rs. 200/- can be set
off as Rs. 200-Rs.100-70 - 10 and you pay only Rs 20 vide GAR 7 Challan

Not necessary to be a service provider in case of reverse charge, since you being
a manufacturer you can take the input credit on such reverse charge.

Dayal http://www.caclubindia.com/homepage/DM%20Associate/
( Expert )
12 February 2008

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