Availment of cenvat credit of tax paid on warehousing charges to storage faciilty provided by Transport and logistic company.

[samiuddin ansari]

Hi...Good morning,

One unit namely, 'A ' has forwarded their finished goods to regular customer 'B' and they have agreement to deliver at manufacturing premises at another city. However, customer 'B' does not require material from supplier every time the same quantity. To save the time, the unit 'A' has availed and received the facility of storage of goods at Transporter and Logistics company say 'C' in the same city of buyer. In return, the 'C' company also issue taxable invoice for warehouse services to 'A', who in turn, avail the cenvat credit of taxes paid on such warehouse facility services. It is requested to through some light on eligibility of cenvat credit of such tax paid as input services to 'A' as the inclusive part of definition of input services prescribes 'storage up to the the place of removal'. In other words, whether cenvat credit of tax paid on warehouse facility provided by company 'C' at another city is entitled to supplier of the finished goods i.e company 'C'.

[Ganeshan Kalyani]

input is eligible.

[YAGAY andSUN]

Since such services are in relation to furtherance of Business, Hence may be allowed for ITC.

AI Summary

Input tax credit for warehousing services: suppliers may claim when services further business and involve storage up to removal. Where warehousing by a transporter is procured to facilitate delivery and constitutes storage up to the place of removal, and is integrally connected to the supplier's business, the tax paid on that warehousing service is eligible as Input Tax Credit because the service relates to the furtherance of business and supports receipt, custody and onward movement of goods to the customer.