Cenvat credit on outward transportation service

[Ajay Kedia]

WE ARE REGISTERED FOR GTA AND ARE MANUFACTURER OF DIFFERENT PRODUCTS. WE HAVE TO PAY TRANSPORTATION CHARGES FOR DELIVERY OF OUR FINAL PRODUCTS. WHETHER CENVAT VREDIT CAN BE AVAILED ON THE SERVICE TAX PAID FOR OUTWARD TRANSPORTATION OF OUR FINISHED PRODUCTS. UNDER WHICH RULE / SECTION IT IS COVERED. THOUGH SOME JUDGEMENTS ARE THERE EVEN THOUGH OUR RANGE OFFICERS ARE DECLINING TO ALLOW CENVAT ON OUWARD TRANSPORTATION SERVICE TAX.PLEASE CLARIFY IN DETAIL.

[Rama Krishana]

No. You can not avail the cenvat credit of service tax paid on outward transportation of goods. The provisions of Rule 2(l) of cenvat credit rules, 2004 clearly denies the credit in such a situation. The judgments which are allowing the credit for the past period before amendment to rule 2(l) of the cenvat credit rules, 2004. If your period is pertaining to that period, yes you can fight strongly with the department about the availability of the same. You may also refer a decision of Larger Bench of CESTAT in which the credit has been allowed during the relevant period.

[Ajay Kedia]

Dear Mr.Ramakrishna, Thanks for your reply and guidelines.You have in the last para mentioned that 'you may also refer a decision of Larger Bench of CESTAT" , kindly clarify which decision you are referring here ? Is it the ABB Ltd. case or any other one ,if other one can u please advise me or send me a copy of the same over my email :[email protected]. Awaiting you early reply. thanks ajay kedia

AI Summary

Cenvat credit denial for outward transportation service may be disallowed under Rule 2(l), with limited pre-amendment exceptions. Cenvat credit for service tax on outward transportation of finished goods is not available under the Cenvat Credit Rules, 2004 due to an exclusion applicable to carriage services; however, tribunal decisions have allowed credit for periods before the Rules' amendment, and a Larger Bench precedent has been cited to support pre-amendment claims.