Input on Freight out during Warranty Supply

[Guest]

Dear All,

 

We have an issue, we are the manufacturer of Equipments.

After the Sales of equipments we will supply warranty replacement to the customer at free of cost.

We charge the Excise on the goods and send the material with Freight Paid basis.

On the Freight we will avail the Service Tax Credit since the customer does not pay on the material as well as on the Freight .

The question is shall we avail the credit on freight out. also note that the ownership of the material is in our account.

Kindly request your feed back on the above.

Thanks

Srikanta

 

AI Summary

Manufacturer Seeks Advice on Service Tax Credit for Freight Costs on Free Warranty Replacements; Ownership Retained A manufacturer of equipment is seeking advice on whether they can avail service tax credit on freight costs for warranty replacements supplied to customers at no charge. The manufacturer retains ownership of the goods and charges excise on them, but the customer does not pay for the goods or freight. One respondent suggests that credit should be allowed as the warranty is included in the original price, recommending written intimation to revenue. Another respondent notes that service tax credit for freight is only available up to the point of removal.