Service tax reversal

[Krishan Gopal]

Sir, we have purchased two machinery from japan and pay cha charges (inward transportation charges)1. one machine return to japan, whether we have to reversed service tax on cha charges or not.2. another machine was capitalized and after that sold it, whether we have to reversed service tax on cha charges or not.Regards, K.Gopal

AI Summary

Prudent to Reverse CENVAT Credit on CHA Charges for Returned Machine to Avoid Tax Litigation Risk A user inquired about the necessity of reversing service tax on CHA charges related to two machines purchased from Japan. One machine was returned, and the other was capitalized and later sold. An expert advised that while the CENVAT Credit Rules, 2004 do not explicitly require reversal of CENVAT credit on input services, it is prudent to reverse the credit to avoid potential litigation with the tax department.