Service Tax on freight

[Samik Chaudhuri]

Sir

We are manufacturing co, can we avail Service Tax credit on freight for direct selling if the payment of freight is made by us. Please clarify.

With thanks and reagrds

Samik Chaudhuri.

AI Summary

Manufacturers can't claim service tax credit on freight beyond the 'place of removal' per CENVAT Credit Rules, 2004. A manufacturing company inquired about the eligibility to avail service tax credit on freight for direct selling when the freight payment is made by them. According to the CENVAT Credit Rules, 2004, service tax credit is not available for outward transportation beyond the 'place of removal,' which is defined as the factory, warehouse, or depot where excisable goods are sold after clearance. However, if the sale is determined to occur at the customer's location under certain conditions, such as the seller retaining ownership and risk until delivery, service tax credit may be admissible.