Cenvat credit can be used to pay service tax on GTA services received by a deemed service provider.

Cenvat credit under the Cenvat Credit Rules, 2004 was considered available for discharge of service tax on GTA services received by the recipient, treated as a deemed service provider. The Tribunal noted that the Rules do not distinguish between a deemed service provider and an actual service provider for this purpose, and that credit of tax paid on inputs and input services may be utilised where service tax is payable. Relying on prior decisions recognising such utilisation for GTA services, it concluded that payment of service tax through Cenvat credit was permissible and the Revenue challenge failed.

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Issues: Whether the recipient of GTA services, treated as a deemed service provider, could utilise Cenvat credit to discharge the service tax liability on such services.

Analysis: The Cenvat Credit Rules, 2004 do not make a distinction between a deemed service provider and an actual service provider for the purpose of discharging service tax liability. Where service tax is payable, credit of tax paid on inputs and input services can be utilised, and prior decisions had recognised that input service credit may be used for payment of tax on GTA services received by the assessee.

Conclusion: The utilisation of Cenvat credit for payment of service tax on GTA services by the recipient was held to be permissible, and the Revenue's appeal failed.

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