Cenvat credit of Service Tax against outward freight

[Samik Chaudhuri]

Can we (Manufacturing Unit) avail Cenvat Credit of Service Tax against out ward freight, the payment of Service Tax (3.09%) is made by us. Please confirm me at earliest.

With thanks and regards

Samik.

[Mahir S]

Sir,

Cenvat credit can be availed on outward freight under GTA service Up to the place of removal.

In your case, if the place of removal is the factory premises, then outward freight credit shall not be available. Cenvat credit availed if any on outward transportation beyond place of removal is not available. This is a settled legal position.

Also please refer to the definition of Input Services under Cenvat Credit rules, 2004 for necessary clarification.

[MUKUND THAKKAR]

Sir,

In addition of above please refer circular no Cx- 988/12/2014 dt 20.10.2014Up to the place of removal.

[PAWAN KUMAR]

Dear Sir,

As per my view, Cenvat credit on outward freight under GTA is admissible. In a recent circular of CBEC, the place of removal has been explained with provision of Sale of Goods Act, 1930, as per which the place of removal will be the place where the sale has taken place or when the property in goods is transferred from seller to buyer. According to such clarification by the board, Cenvat credit should be allowed on outward freight under GTA up to the place of removal i.e. customer doorstep. In other cases such as cenvat credit on outward freight under GTA used for export of goods from factory and removal to Depot/Consignment Agent is admissible.

AI Summary

Cenvat credit on outward freight allowed up to the place of removal; not available if removal occurs at factory premises. Cenvat credit for Service Tax on outward freight under GTA is allowable up to the place of removal; if the place of removal is the factory premises, such credit is not available. The Board has explained place of removal with reference to the Sale of Goods Act as the point where property transfers, permitting credit on freight to the buyer's location. Freight for exports and for removal to a depot or consignment agent is admissible where the place of removal lies beyond the factory.