Taken Cenvat credit of Service Tax on GTA service on the basis of Input Invoices(Excise) .

[Asked by Guest]

Respected Sirs,

Taking credit on the basis of Input Invoices(Excise) when service tax paid by the manufacturer-supplier on GTA service of inward transportation of goods upto factory.

The freight for transportation was paid to the transporter by the manufacturer-supplier of the goods and hence they paid service tax, too, on reverse charge mechanism. It was the outward transportation for them and thus the no question of taking credit of service tax so paid by them. But for us it was inward transportation of inputs and we are always to take credit of service tax so paid on inward transportation of inputs even if the said service tax is paid by the manufacturer-supplier as a result of making payment of freight to the transporter.

Sirs, In the above case Cenvat credit taken is wrong or irregular under any rules, notifications, circulars & any case law.

Thanks & Regards

nirmal

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AI Summary

Cenvat credit eligibility for GTA services: reimbursement by buyer does not automatically confer credit rights when supplier arranged transport.
Whether the buyer can take Cenvat credit for service tax on GTA where the supplier paid the GTA tax under reverse charge but recovered freight and service tax in the sales invoice hinges on who is the service recipient. If supply is FOR and the supplier arranged and paid the transporter, the supplier is the recipient and only supplier can claim credit; reimbursement by the buyer does not convert the buyer into an eligible recipient unless contract, payment liability, and documentary evidence show the buyer effectively paid or availed the service.