Prima facie input service credit for GTA services supported waiver of balance pre-deposit and recovery stay in appeal.

Prima facie input service credit was found available on service tax paid for GTA services used in erection, commissioning and installation work, because the applicant was providing taxable output services. On that basis, the Tribunal held that the pre-deposit already made was sufficient, waived the balance of disputed duty, interest and penalty, and stayed recovery during the pendency of the appeal. The Tribunal also noted the relevant Board circular on the tax treatment of the activity and pending disputes.

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Issues: Whether waiver of pre-deposit of the disputed duty, interest and penalty was justified on a prima facie view that service tax paid on GTA services used for providing erection, commissioning and installation services constituted eligible input service credit.

Analysis: The applicant was engaged in erection, commissioning and installation of transmission lines and had transported goods to different sites, paying service tax on GTA services. On the materials before it, the Tribunal found a prima facie entitlement to credit as the applicant was a provider of taxable output services. The Tribunal also took note of the Board circular clarifying the tax treatment of such activity and the treatment of pending disputes.

Conclusion: The Tribunal held that the pre-deposit already made was sufficient, waived the balance amount of duty, interest and penalty, and stayed recovery during the pendency of the appeal.

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