Service tax credit on service tax paid on supply of tangeble goods

[srinivasan.K kuppuswamy]

Sir,

we are using the packing materials supplied free of cost  for packing and export.We are paying service tax under reverse charge for transaction as well for rental charges.The effective control of stock and possession is with us.

We are unable to claim service tax refund under Notification No. 41/2012-ST due to invoice correlation problems.

Due to this problem whether we can go for service tax credit for the service tax paid under reverse charge.

and except for this service for the balance export of services i.e cha, port services, terminal handling will apply for refund. 

 Notification No. 41/2012-ST main text is reproduced.

(i) in the case of excisable goods, taxable services that have been used beyond the place of removal, for the export of said goods;

(ii)    in the case of goods other than (i) above, taxable services used for the export of said goods; but shall not include  any service mentioned in sub-clauses (A), (B), (BA) and (C) of clause (l) of rule (2) of the Cenvat Credit Rule, 2004

(B) “place of removal” shall have the meaning assigned to it in section 4 of the Central Excise Act, 1944:

(b) the rebate shall be claimed either on the basis of rates  specified in the Schedule of rates annexed to this notification (hereinafter referred to as the Schedule), as per the procedure  specified in  paragraph 2 or on the basis of documents, as per the  procedure  specified in paragraph 3;

(c) the rebate under the procedure specified in paragraph 3 shall not be claimed wherever the difference between the amount of rebate under the procedure        specified in paragraph 2 and paragraph 3 is less than twenty per cent of the rebate available  under the procedure specified in  paragraph 2;

 Request your expert opinion by mail.

THIS IS MY PERSONAL QUERY AND HENCE I AM  REQUESTING YOUR FREE EXPERT OPINION .

 KIND REGARDS

K.Srinivasan

[Madhukar N Hiregange]

If you are going for the standard rate then no credit for the post removal entries are possible. Eligible Credits prior to that stage are available whether charged by the SP or under RC/JC.

AI Summary

Service tax credit: post-removal credits disallowed where exporter opts for standard rate rebate, pre-removal credits remain claimable. Election of the standard rate rebate precludes claiming credit for post-removal entries; eligible pre-removal credits remain available whether service tax was paid by the service provider or under the reverse charge mechanism.