DUTY % & RATE OF INTEREST

[NANDA H.L.]

GOOD MORINGIn financial year 2011-12 & 2012-13 we have not paid the Service Tax towards GTA. Now we are paying the same. 1. As I understand, for the period Apr11 to Mar12 we need to pay Service Tax 10 percent & interest rate 18 percent 2. For the period from Apr12 ST to be pay at the rate of 12 percent .3. We availing 75 percent abatement. ST will be paid on 25 percent , can we avail the credit for Freight Inward & Freight OutwardPlease suggest.

[Mahir S]

Whatever you have mentioned above is correct and as such there is no suggestion, except that (i) freight outward credit is eligible upto the place of removal and (ii) input credit can be availed only after making cash payment thereof.

[YAGAY andSUN]

Dear Nanda H.L.

You can avail the CENVAT  credit on freight inwards but you can avail the CENVAT credit on outward freight up-to place of removal only.

Further, for availing the benefit of abatement you must obtain the declaration from your Transporter that they have not avail the CENVAT credit on inputs, input services and on capital goods.

Regards,

Team YAGAY & SUN

(Indirect Tax Consultants)

AI Summary

Service tax abatement: pay outstanding tax with interest; limited Cenvat credit for freight, subject to transporter declaration. Tax on GTA services must be paid for earlier periods with applicable interest; abatement reduces taxable value to a portion of gross receipts. Cenvat credit is permissible on freight inward and on outward freight limited to movement up to the place of removal, and input credit is claimable only after cash payment. Claiming abatement requires a transporter declaration that the transporter has not availed Cenvat credit on inputs, input services, or capital goods.