Service Tax Credit - IPS - very urgent.

Dear Mr Sameer,

1. As per the Servce (import of services) Rules, if an Indian pays service tax in respect of import of services is deemed to be provided by the Person LIable to pay service tax (your company) to himself (your company). Hence, this is not an "input service" as per Cenvat Credit Rules.

2. Service tax on Royalty is paid by your company under section 66A r.w. Rule 2(1)(d)(iv) of Service Tax Rules.   As per Rule 3 of Service Tax Rules, cenvat credit can be taken only if service tax is paid on input service under section 66.

3. Hence, your company cannot take cenvat credit for the service tax paid (under import of services) on royalty paid to your foreign parent company.

Dear Mr Sameer,

1. As per the Servce (import of services) Rules, if an Indian Resident pays service tax in respect of import of services, then such service  is deemed to be provided by the Person LIable to pay service tax (your company) to himself (your company). Hence, this is not an "input service" as per Cenvat Credit Rules.

2. Service tax on Royalty is paid by your company under section 66A r.w. Rule 2(1)(d)(iv) of Service Tax Rules.   As per Rule 3 of Cenvat Credit Rules, cenvat credit can be taken only if service tax is paid on input service under section 66.

3. Hence, your company cannot take cenvat credit for the service tax paid (under import of services) on royalty paid to your foreign parent company