Cenvat credit of service tax

[Narasimha Subramanian]

We are into manufacturing and our products are excisable. Our price to our customer includes freight component also and we dont charge them seperately. We ship the material through courier to our customers and our courier bill has service tax charged to us. Can we take credit of this service tax charged by the courier company against the Excise Duty that is being paid? Please clarify.

[Surender Gupta]

In case you include the freight component (in this case courier charges)in the gross amount and charge excise duty on the inclusive amount, it is evident that your place of removal is place of buyer. Therefore, you are entitled to avail cenvat credit being input service upto the place of removal.

[Mukesh Kumar]

If you establish that the place of removal is not your factory but the buyer's presmises, you can take the credit.

AI Summary

Cenvat credit eligibility: courier service tax is creditable where freight is included and place of removal is buyer's premises.
Where the freight component is included in the price and excise duty is levied on the inclusive amount, the place of removal is treated as the buyer's premises; accordingly courier service tax constitutes an input service and the service tax paid is admissible as Cenvat credit against excise.