Credit of service tax charged by airway agency

[pardeep bisht]

X is a manufacturing unit and dispatch F.G. to his customer Y and charges the freight in the invoice along with service tax(@2.575%)and deposit the same to Govt. accordingly, but for delivering the material X use airway service and airway agency charge alongwith service tax from X. Does credit of service tax charge by airway agency is allowed. Please clarify.

[Mukesh Kumar]

No, you are not eligible to avail cenvat credit on outward transportation of goods whether it is GTA or airway or railway.

[Guest]

due to recent judgments - out ward frt credit is allowed refer 1. M/s ABB LTD 2 & 4. THE INDIA CEMENTS LTD 3. M/s ZUARI CEMENT PVT LTD 5. THE COMMISSIONER OF CENTRAL EXCISE, HYDERABAD-III 6. THE COMMISSIONER OF CENTRAL EXCISE, TIRUPATHI 7. COMMISSIONER OF CUSTOMS & CENTRAL EXCISE, HYDERABAD Vs 1. COMMISSIONER OF CENTRAL EXCISE & SERVICE TAX, BANGALORE 2 to 4. COMMISSIONER OF CENTRAL EXCISE, TIRUPATI 5 . M/s PENNA CEMENT INDUSTRIES LTD 6. M/s THE INDIA CEMENTS LTD 7. M/s GREY GOLD CEMENTS LTD

AI Summary

Cenvat credit on outward freight is contested; administrative view denies it while some judgments permit such credit. Whether cenvat credit is available on service tax charged by an airway agency for outward transportation is disputed. One view asserts that credit on outward transportation-GTA, airway or railway-is not allowable. Another relies on recent judicial decisions holding that outward freight credit is permissible and cites multiple case authorities supporting allowance of credit on such outward transportation services.