ABATEMENT ON FREIGHT PAID

[Guest]

We are a partnership manufacturing firm and registered assessee in central excise and service tax both. In c.ex. we are taking credit of cenvat of inputs (Raw material).

we are service receiver in GTA. can we take benefit of 75% abatement on freight paid by us.

Thanks

[YAGAY andSUN]

Dear Sanjay,

No you cannot avail the abatement of 75% as it has been revised to 70%. You would have to pay the service tax on 30% provided service provider make declaration of non availability of CENVAT credit on Inputs, Input Services and capital goods.

Regards,

YAGAY and SUN

(Management, Business, and Indirect Tax Consultants)

[Ganeshan Kalyani]

The abatement rate on GTA has been reduced to 70% and the person who pays the freight shall pay service tax on 30% of freight amount. the change is w.e.f. 01.04.215. secondly the credit can be availed on inward freight and on outward freight upto the place of removal.

[Guest]

Thanks you both a lot.

AI Summary

Abatement on freight: payer liable for tax on the non abated freight when provider disclaims CENVAT credit. Abatement on freight was reduced to an abated rate so the person paying freight must pay service tax on the non abated portion where the service provider declares non availability of CENVAT credit on inputs, input services and capital goods. CENVAT credit can be availed on inward freight and on outward freight up to the place of removal.