Input service credit related to barges and tugs -reg

[vinay wakde]

We are having our own Barges/Tugs. We are giving these Barges/Tugs on hire. We are paying service tax on monthly basis on hire income/ shipping income. As per the contract, all the expenses incurred during hire period has to bare by us only. The Custom House Agent is engaged who looks after the barges. The CHA raising the bills / invoices on us towards Agency fees and debit notes for reimbursement of Port Dues paid on our behalf to Port authorities at various ports.

Kindly give your valuable guidance on following queries:-

(1) Whether we can take Input service credit on bills/debit notes raised in our name by the Custom House Agent and adjust the Input service credit towards payment of Service Tax i.e. payment of service tax on output service namely “supply of Tangible goods”.

(2) Whether we have to maintain separate record for receipt & consumption of input services as per Rule 9(6) of Cenvat Credit Rules?

(3) Is there any separate monthly CENVAT Return to be filed other than CENVAT Return under Rule 9(7) of CCR to the Service Tax authority? if we adjusted the credit taken on input service for payment of service tax on output service?

Kindly give us your valuable guidance.

[Ganeshan Kalyani]

You can certainly take the credit.

AI Summary

Input service credit on CHA invoices can be claimed and adjusted against output service tax liability. Input service credit may be availed on CHA invoices and debit notes for agency fees and port dues paid on behalf of the owner of barges and tugs, and such credit may be adjusted against the service tax liability on the output service described as supply of tangible goods. The document confirms entitlement to take the credit while posing further questions on record-keeping under Rule 9(6) and return filing under Rule 9(7) which are not resolved in the reply.