Availment of Service credit on Retention Charges

[Asked by Guest]

Dear Sir,

Can we avail Service tax credit on retention charges charged by Custom House Agent , Goods Transport Agency service.Please explain,Please give us any reference regarding this,Thanks and regards.

[Ganeshan Kalyani]

In my view retention is not a service. it is kind of penalty or compensation to mitigate the loss of service in case called to avail service but delayed by time.

AI Summary

Retention charges not a taxable service, so input tax credit on such charges is not available.
Whether retention charges by Custom House Agents or Goods Transport Agencies qualify as a taxable service; the view expressed is that retention charges are not a service but a penalty or compensation to mitigate loss where a service is delayed or not availed, and therefore do not give rise to input tax credit entitlement.