availment of service tax credit for GTA out ward services

[ramswaroop vyas]

Respected Sir,

Thanks for your wonderful replies to my query on above subject i would have not got such details even after paying...but my query still remains open....As nobody has covered that if i am showing freight separately and not paying excise on the same........

so can you please expert throw light in this...can i still take service tax credit as i am charging freight separately in invoice.

regards

ramswaroop

[KASTURI SETHI]

Sh.Ramswaroop Ji,

Pl. wait for today only.

[Mahir S]

Sir,

In your case, You need to pay excise duty on the freight part also and you can avail input service credit thereon.

Showing freight separately has no connection with payment of excise duty and availment of input service credit.

[KASTURI SETHI]

I agree with Sh.Mahir S. Sir. I intend to add that in order to prove that place of removal is buyer's doorstep the following points are to be followed. These are:-

1. Terms and conditions of the contract must prove that place of removal is buyer's doorstep.

2. At what point of time is sale effected.

3. Date of payment of the goods sold.(including freight)

4. Ownership remained with the manufacturer (seller) till the delivery of the goods.

5. Insurance/risk factor of the manufacturer till the goods are delivery of the goods.

Documentary evidence in respect of all the points is required.

[YAGAY and SUN]

Please check Supreme Court's Judgment in the matter of Ispat Industries Ltd for availment of CENVAT credit on GTA Services.

[KASTURI SETHI]

Dear Sirs,

I am of the view that this judgement of Supreme Court would not be accepted by the Board. Since all the three judgements i.e. Ispat Industries Ltd, EMCO Ltd., Roofit Industries Ltd. have been passed by the Double Benches of the Supreme Court, there is every possibility that matter would be referred to Larger Bench of the Apex Court by the Board after consultation with the Ministry of Law. The very basis of the judgement in the case of Ispat Industries Ltd. and Roofit Industries Ltd. is Section 19 of Sale of Goods Act. It is a matter of interpretation/question of law. No rule has been struck down by the Supreme Court.

[KASTURI SETHI]

Place of removal in terms of provisions of Central Excise Act, 1944 - Clarification

Circular No. 999/6/2015-CX, dated 28-2-2015

AI Summary

Cenvat credit on freight: payment of excise on freight and proof of place of removal required to claim credit.
Availment of Cenvat credit for GTA outward services depends on payment of excise duty on the freight component and demonstrable proof that place of removal is the buyer's doorstep. Merely showing freight separately does not permit credit; claimants must furnish contractual terms, timing of sale and payment (including freight), retention of ownership and risk by the seller until delivery, and documentary evidence. Judicial precedents exist but may be contested administratively and could be referred to a larger bench; departmental circulars on place of removal are relevant guidance.