Services received from abroad - Tax can be paid from CENVAT Credit? HC
OUR Jurisprudentiol on Friday raised many eyebrows. The High Court had held, “In the instant case, though he is the recipient of service tax, the service provider is outside the country. In law, he is treated as a service provider and is levied tax. In other words, the liability to pay tax on the service, which he has received, is foisted on him under law. It is to discharge the liability he is entitled to use the Cenvat credit, which was available with him, and therefore the Tribunal was justified in interfering with the order passed by the Commissioner.”
Now, as per Rule 5 of the Taxation of Services (Provided from Outside India and Received in India) Rules, 2006, “The taxable services provided from outside India and received in India shall not be treated as output services for the purpose of availing credit of duty of excise paid on any input or service tax paid on any input services under CENVAT Credit Rules, 2004.”
Does it mean that imported services will not be treated as output service for
++ Availing credit on inputs or input services?
++ Payment of Service Tax from CENVAT Credit?
Anyway, the issue covered in the High Court order was for the period prior to 19.04.2006, when the imported services were not taxable at all. But that was not an issue before the High Court.