text: Refund of Cenvat credit on services under reverse charge mechanism | Lakshmikumaran & Sridharan Attorneys
  It is been almost a year since the negative list of services based regime for levy of Service Tax under the Finance Act, 1994 (in short ‘the Act’) was introduced. The industry is, in fact, slowly getting acquainted with the new system. However, there are certain provisions the impact of which is required to be fully understood particularly those relating to ‘reverse charge mechanism’. In this article, we shall discuss the provisions relating to refund of Cenvat credit to service providers providing services to which the reverse charge mechanism is applicable.
  Rule 5B of the Cenvat Credit Rules, 2004 (in short, ‘Credit Rules’) provides for refund of Cenvat credit availed by the service providers whose services are notified under Section 68(2) of the Finance Act, 1994. Section 68(2) of the Act provides that in respect of taxable services as may be notified by the Central Government, the service tax thereon shall be paid by such person and in such manner as may be prescribed. In addition, the proviso to this Section provides that the Central Government may notify the service and the extent of service tax which shall be payable by such persons. In accordance with Section 68(2) of the Act, Notification No. 30/2012-S.T., dated 20-6-2012 has been issued notifying certain services and the extent of service tax to be paid by the persons other than the service providers.