CENVAT CREDIT OF SERVICE TAX PAID ON FREIGHT O/W

[Guest]

Dear Sir,

In the present scenario, can it be clarified that what is current legal position, if we avail cenvat credit of service pax paid on freight (domestic sale-o/w) keeping in view of the fact that Assessable value is inclusive of freight charges i.e. unit rates are FOR (door delivery). Should it be allowed or not ?

Thanks,

PRADEEP GARG

[Ganeshan Kalyani]

Input credit is allowed on outward freight upto the place of removal. Therfore in my view you can take credit.

[DR.MARIAPPAN GOVINDARAJAN]

I also endorse the views of Kalyani.

AI Summary

Cenvat credit on outward freight allowed up to place of removal when assessable value includes freight charges. Input credit of service tax on outward freight is allowable for the portion of transportation up to the place of removal; therefore, where assessable value is inclusive of freight (FOR door delivery), credit may be taken to the extent relating to movement until the place of removal.