ITC on inward transportation

[jagadesh kumar bhojanapalli Kumar]

Dear Sir,

We are having 100 percent EOU unit and we are paying service tax on inward transportation 12.36 percent on 25 percent of transportation charges in connection with  imported & indigenous goods  with availing abatement (75 percent ) .  We are paying through Bank challan and taking credit in subsequent months. whether we can avail or not please clarify the same.  Range superintendent is issuing a letter to reverse the same with interest.  (We have not utilized the availed credit)

Pl clarify the same

[Dhanesh Kabadi]

ok, what ever Range superintendent is saying is right........GTA is coming under Reverse Charges Mechanism.. in Reverse Charge we don't having any facility to take Cenvat Credit........

[jagadesh kumar bhojanapalli Kumar]

Dhanesh Kabadi version is 100 percent wrong.

[Madhukar N Hiregange]

See the definition of input service in the cenvat credit rules. The input services [ which include services for receiving material] are eligible for credit and the same maybe utilized for payment of ED equivalent by the EOU or service tax if you are providing any refund can be sought.

Please reply in detail to the letter IF issued as it is not in line with the law with a copy to higher officer by speed post acknowledgement due. Avoid any oral interaction with these type of officers who do not even read the law..

AI Summary

Input service credit on inward transportation may be available despite reverse charge; challenge departmental reversal in writing.
Dispute whether an EOU can claim input service credit for inward transportation treated under the reverse charge mechanism; the department ordered reversal, but commentators cite the Cenvat Credit Rules' definition of input service as covering services for receiving material, permitting credit use to discharge duty-equivalents or to seek refund, and advise a formal written challenge to the departmental letter with escalation to higher authorities.