service tax 1.5%on Import material value(IGST ON OCEAN FREIGHT) AND Service tax credit on outwards transportation.

[BHAKTIKANT BHATT]

SIR,

we are a packaging material manufacture unit.We have import our Raw Material (Plastic Granual) Now Excise EA-2000 Auditor raise a question on import Raw Material and ask us to Pay Service Tax 1.5%on Import Material CIF Value From April-2017 to June-2017 IGST ON OCEAN FREIGHT IN RESPECT OF IMPORT MATERIAL. AS PER CIRCULAR NO.206/4/2017- Service Tax Dt.13/4/2017.

Kindly give us your valuable suggestion with cited any case whether we need to PAY 1.5% Service tax on import material value and after it allowable to take credit then in GST Rule How can we take credit ?

2. query.

We have paid service tax on our outwards transportation of goods from our factory to customer premises.Also we have paid Excise duty on transportation charge from our factory to customer premises and freight amount separate mention in our sale invoice.

Now Excise Auditor say your are not avail cenvat credit of service tax paid on outwards freight from factory premises to customer place. also give us supreme court Judgment copy of Commissioner of Central Excise Service Tax Versus Ultra Tech Cement Ltd. CIVIL APPEAL NO. 11261 OF 2016. = 2018 (2) TMI 117 - SUPREME COURT OF INDIA

KINDLY GIVE YOUR EXPERT SUGGESTION FOR ABOVE TWO MATTERS.

Thanking You,

AI Summary

Ocean freight taxation: importer liable under reverse charge with potential double taxation, credit subject to rules.
Ocean freight for imports is taxable on the importer under a reverse charge mechanism, producing potential double taxation where freight is included in import value (CIF); input tax credit is available for tax paid under reverse charge subject to rules. Credit for service tax on outward transportation by a manufacturer depends on the statutory definition of place of removal and factual contract terms showing transfer of property at destination, including retention of ownership, transit risk, and freight forming part of the price.